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India’s Supreme Court Turned the Tables on Crypto Ban in Landmark Ruling

In a momentous ruling, India’s Supreme Court has lifted the ban made by the Reserve Bank of India (RBI), the nation’s central bank, on banks and other regulated entities dealing with cryptocurrencies. As reported on March 4, the court noted that preventing regulated entities from offering banking services to crypto trading stakeholders did not hold any water.

RBI’s biased decision

In April 2018, RBI made a controversial decision to impose a blanket ban on regulated financial institutions from dealing with crypto businesses. Three months later, crypto exchanges found themselves on the receiving end as banks had to close their accounts and this thwarted crypto adoption in India.

Nevertheless, relevant stakeholders in the crypto sector did not throw in the towel as they were ready for a legal battle, as evidenced by both industry and public-led petitions. In January 2020, a breakthrough seemed imminent as the Internet & Mobile Association of India (IAMAI) filed an appeal before the Supreme Court challenging the RBI’s crypto ban decision.

Interestingly, RBI had responded by stating that cryptocurrencies, such as Bitcoin and Ethereum, had not been banned as its resolution was pegged on highlighting the risks linked to crypto trading to regulated entities like banks.

The court ascertained, “When the consistent stand of RBI is that they have not banned VCs and when the government of India is unable to take a call despite several committees coming up with several proposals including two draft bills, both of which advocated exactly opposite positions, it is not possible for us to hold that the impugned measure is proportionate.”

The Supreme Court judges handling the case noted that the RBI’s decision was not appropriate.

India’s appetite for blockchain

India is continuously positioning itself as one of the preferred blockchain hubs globally. For instance, according to LinkedIn’s 2020 Emerging Jobs Report, sought after positions such as blockchain developers, have skyrocketed to unprecedented levels in India.

It is also speculated that Kerala, a southwestern Indian state, will churn out 20,000 blockchain experts by 2021. With crypto trading getting the green light from the Supreme Court, crypto adoption in India is now guaranteed without fear of contradiction.

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India’s Central Bank Aims to Undo the Supreme Court Ruling on Lifting the Crypto Ban

India’s central bank, the Reserve Bank of India (RBI) has planned to report a review petition on the recent Supreme Court’s cryptocurrency ruling, according to the Economic Times.

The RBI made a controversial decision to impose a blanket ban on regulated financial institutions from dealing with crypto businesses in April 2018.

India’s Supreme Court lifted the ban made by the RBI on banks and other regulated entities dealing with cryptocurrencies. The court ruled on the fact that preventing regulated entities from offering banking services to crypto trading stakeholders did not appear to be valid.

Due to the ban from the RBI, several cryptocurrency platforms that have moved their operations to other jurisdictions such as Singapore, are now planning to move back to India. Banks can also allow customers to link their bank accounts to cryptocurrency platforms, enabling trading.

Legal expert, Abhishek A Rastogi, Partner at Khaitan & Co said, “[The Supreme Court] SC may look at the RBI’s review petition but as of now, the cryptocurrency platforms can operate in India. Many companies have even gone bankrupt after the RBI’s diktat and they may also look to initiate action in this regard.”

The review petition from the nation’s central bank arose from concerns of the apex court’s decision that could pave the way for trading in cryptocurrencies and put the banking system at risk.

The case was initially petitioned by the Internet and Mobile Association of India (IAMAI) against the central bank.

Blockchain jobs in India continue to rise

According to LinkedIn’s 2020 Emerging Jobs Report, sought after positions such as blockchain developers, have skyrocketed to unprecedented levels in India. Others include JavaScript developers and artificial intelligence (AI) specialists. Some of the Indian cities where blockchain developers are in high demand include New Delhi, Hyderabad, and Bengaluru.

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India’s Government Plans to Bring Back Law to Ban Cryptocurrencies

India’s government plans to bring back the law that would ban cryptocurrencies in the country. A report revealed that the Finance Ministry is now inviting other ministries to have a discussion of its earlier draft on the crypto ban introduced a year ago.

A senior government official stated, “A note has been moved (by the finance ministry) for inter-ministerial consultations. After the consultations, the draft should be sent to the parliament for final review.”

Final judgment may call for better regulation, not ban

The government is considering a legal framework as more effective than a circular from India’s Central Bank in this regard. The April 2018 circular from the Reserve Bank of India (RBI) prevented local banks from providing banking services to individuals and companies dealing with cryptocurrencies.

After consultations, the draft would be sent to the cabinet and then to parliament. If the draft is similar to the earlier proposal, then the bill would be a massive blow to the crypto community in the country.

Earlier in 2019 July, a high-level panel from the government prepared a draft that proposed a complete ban on the use of cryptocurrency in India. The draft had proposed imprisonment of up to 10 years and a fine of up to $3.29 million for anyone dealing with cryptocurrencies.

In March 2020, the Supreme Court of India overturned the banking ban on cryptocurrencies imposed by the Central Bank as unconstitutional and allowed all banks in the country to provide banking services to crypto firms.

As experts previously warned, the country’s fight for cryptocurrency was not over with the Supreme Court’s overturning the 2018 banking ban. The process of a possible ban on cryptocurrency is still allegedly ongoing as the industry players are now being called to engage in a constructive discussion.

How the new crypto law in India could play out

The legal status of cryptocurrencies in India still remains far from settled. The country is a good example of nations across the world, which are struggling to create proper guidelines for cryptocurrencies. India’s prime minister and other national leaders are getting it difficult to ignore crypto adoption.

Now they have come to realize that if they ban crypto assets, then courts would step in and overturn the ban. Efforts to impose a ban on cryptocurrencies in India is next to impossible. Regulatory authorities have no choice, but to accept the legitimacy of cryptocurrency as an asset class.

India Considers Banning Crypto Trading Which Could Impact 1.7 Million Dependent Local Traders

The federal cabinet in India is expected to discuss a new bill that will ban cryptocurrency trading soon. This will place India among other Asian economies that have decided to regulate the fledgling crypto market, according to Bloomberg.

More emphasis on blockchain technology

Once discussed, the bill will be sent to the Indian parliament. Nevertheless, the Indian federal government is keeping a watchful eye on blockchain technology as it intends to encourage its application in different sectors.

According to LinkedIn’s 2020 Emerging Jobs Report, sought after positions like blockchain developers have skyrocketed to unprecedented levels in India. Therefore, it seems the government is keen on maintaining this trend with its think tank dubbed Niti Aayog, even if it outlaws cryptocurrency trading.

Crypto’s ups and downs in India

Crypto trading has had its ups and downs in India because, despite the government’s efforts to ban it in the past, it has been favored by numerous overturns by the supreme court.

For instance, in March 2020, a sigh of relief was witnessed after the Supreme Court turned the tables on a crypto ban imposed by the Reserve Bank of India (RBI), the nation’s central bank, in a landmark ruling. It noted that preventing regulated entities from offering banking services to crypto trading stakeholders was unconstitutional. Following this ruling, the RBI changed tune and confirmed that no banking ban existed in the cryptocurrency sector.

Nevertheless, it looks like things are going back to the drawing board because the new bill aims to stamp the Indian administration’s authority in prohibiting the trading of cryptocurrencies.

1.7 million Indians might be affected

The renewed efforts to tame crypto trading could affect at least 1.7 million Indians indulging in the digital assets arena. The crypto space is a force to reckon with on India soil because crypto trading soared by 400% despite the coronavirus (COVID-19) lockdown.

The planned outlaw has started to elicit reactions. For instance, a New Delhi-based lawyer Sanjay Khan noted:

“Instead of a ban, India needs a regulatory framework to protect uninformed retail consumers to ensure adequate oversight of the government and the RBI over cryptocurrency businesses.”

Time will tell whether the new bill will ever see the light of day.

India’s Finance Minister Says Crypto Ban May not Happen and Government May Experiment with New Technologies

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India’s finance minister, Nirmala Sitharaman, has hinted that the government may not go for a blanket ban on cryptocurrency in the country.

The finance minister has said that the government is open to experimentation with new technologies and is not closing its minds for them. Sitharaman added that the government is engaging discussions with the Reserve Bank of India and would take a very calibrated approach on the matter.

According to the finance minister, the call on cryptocurrencies would be taken after deliberations with cabinet members and the Reserve Bank of India (RBI) are over. She revealed that the RBI is engaging in lots of discussions and negotiations regarding cryptocurrencies and would take a call on how unofficial cryptocurrency would be handled and regulated.

In an interview with CNBC-TV18 on March 6, Sitharaman said: “We want to make sure there is a window available for all kinds of experiments which will have to take place in the crypto world. It is not as if we are going to look inwards and say we are not going to have any of this. There will be a very calibrated position.”

The finance minister said that the government is not averse to new technology, and therefore the government’s position on crypto assets will be a “calibrated one.” She said that since the globe moves fast with technology, India’s government cannot look the other way. She further mentioned that in the fintech space, India is leading the way and several nations are looking to emulate India’s fintech-based developments.

India’s cryptocurrency stakeholders, who have been lobbying in support of positive regulation for the industry against an outright ban, have welcomed the recent statement from Sitharaman.

Plans to Issue National Cryptocurrency

The finance minister’s remarks on cryptocurrencies shed new light regarding the government’s plan on such digital assets. In late January, the government revealed plans to bring a new bill (The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021) in the country’s lower house to ban private cryptocurrencies like Bitcoin and instead create a framework for the introduction of an official digital currency to be issued by the country’s Central bank.

In 2018, RBI banned all cryptocurrencies, a move aimed to protect the country’s financial system. But in 2019, India’s Supreme Court asked the government to come up with crypto policies. In 2020, the Supreme Court overturned the RBI’s ban and this was a big win for local crypto users and the victory enabled a dramatic increase in crypto trading volumes in the country.

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India Cryptocurrency Ban Resurfaces, Traders and Miners to be Targeted This Time

The possibility of banning cryptocurrencies in India, Asia’s second-most populous nation with an enormous amount of cryptocurrency backers, has been brought up again after a senior official confirmed ongoing talks about a bill criminalizing investments in the booming asset class.

Per a Reuters report on the matter, the bill will particularly penalize digital currency miners and traders and may look to implement a 2019 recommendation of a 10-year jail term. Additional information was not provided.

India’s crypto ban news is a recurrent topic in the crypto space today. The country’s Supreme Court in March 2020 foisted the Central Banks attempt to dissolve the ban on crypto, an event that has even served to boost the growth of trading activities in the country. With the latest report of an imminent ban, however, the senior official said the discussions are in the final stages.

Disengagement Amid Bitcoin’s Bull Run To $100,000

The move by the Reserve Bank of India to ban all forms of cryptocurrency activities in the country is coming as Bitcoin has seen impressive investors and HODLers, with its journey to a $100,000 valuation, following its last burst above $61,000 over the weekend.

The Indian crypto savvy population will be given a 6-month grace period to liquidate their asset according to details of the new bill, a period after which the penalty to be made known later will be enforced.

Bitcoin holders and investors in India are however not swayed with the imminent ban, riding the bullish run alongside the market. Meanwhile, the ban is pending.

“If the ban is official we have to comply,” Naimish Sanghvi, who started betting on digital currencies in the last year, told Reuters, referring to existing concerns about a potential ban. “Until then, I’d rather stack up and run with the market than panic and sell.”

China Financial Institutions Bars Crypto as Payment Tools

Three major regulatory bodies in China have prohibited banks and financial firms to provide cryptocurrencies transaction services.

The news, published by Reuters Wednesday, highlighted that the affected outfits must not offer clients any services involving cryptocurrencies, such as registration, trading, clearing, and settlement, including banks and online payments channels.

Three entities include the National Internet Finance Association of China (NIFA), the China Banking Association (CBA), and the Payment and Clearing Association of China (PCAC). Announced in a joint statement early this week and said that:

“Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.”

The Asian giant clamped down cryptocurrency exchanges back in 2017, while it has not prohibited individuals from holding the nascent digital assets directly. China has long been known to have a love-hate relationship with cryptocurrencies. In a series of twists over the past year, Beijing clarified its stance on Bitcoin, noting that the asset is legal if it did not threaten the fiat Yuan in any form.

The attempt to stifle Bitcoin and altcoins did not reduce the crypto activities in the country as key regions, which is well-known crypto mining hubs. The People’s Bank of China (PBOC) has also been developing the Digital Yuan, a Central Bank Digital Currency (CBDC). The market believes the authorities take it as an excuse to ban cryptocurrencies amongst its citizens.

Despite China, Nigeria- Africa’s largest P2P marketplace, and India have banned crypto activities nationwide. While the crypto-savvy population has often devised various means to continue business as usual as crypto, which considers a veritable tool to combat the dwindling value of fiat money. The ban has often taken a subtle toll on the broader cryptocurrency industry.

Number of Ethereum Whales on the Decline as Market Sees a Massive Correction

The ongoing market correction is stirring the attainment of new records in the crypto industry, albeit on the bearish side. Ethereum (ETH), the world’s second-largest digital currency by market capitalization, has seen its meteoric rise to a new all-time high (ATH) truncated with on-chain metrics spiraling downwards.

According to Glassnode analytics, the number of Ethereum investors by holding at least 100 coins has just reached a 3-year low of 42,928.

The specific downturn in investor’s sentiment towards Ethereum came as the broader market is battling news of uncertainties across the board. Asian giant China, where the bulk of the Bitcoin and crypto mining activities takes place, has wielded the big stick with a firm stance that may see miners sent away. This is a move preceded by the ban on crypto activities for the country’s financial institutions.

Concerned thought leaders in the cryptocurrency ecosystem have expressed worries over the energy consumption demands of digital assets generated through mining. With the bulk of this activity being fueled by coal-generated energy, the environmental sustainability concerns have may be influencing the move by the Chinese regulators to purge its shores of the activities of miners.

The current Ethereum blockchain works based on the Proof-of-Work (PoW) model, and as such, the mining concerns are valid. However, the market responds to a more pervasive bearish sentiment that does not exonerate any digital currency or tokens. At the time of writing, Ethereum was trading at $2,215.57, up 0.41% in the past 24 hours after paring off some of the losses accumulated during the weekend.

As the big coin holders are giving away their coins, the price of Ether has taken a massive plunge from the ATH of $4,362.35 set earlier in the month. Barring any united upsurge in the global cryptocurrency market, Ethereum will be looking forward to renewed investor’s interest as well as its forthcoming London Hardfork or EIP 1559 upgrade to push for a resounding recovery.

China's Hainan Province Cautions Citizens Against Illegal Crypto Trading

China’s Hainan Province has issued a new warning to its residents as the broader effort of the Asian country to clamp down on digital currency activities.

According to a Reuters report, citing local media sources, Hainan officials warn people particularly against illegal fundraising schemes involving cryptocurrency and blockchain such as Initial Coin Offerings.

The officials, including those from the local financial supervision bureau and a local branch of the People’s Bank of China (PBOC), say the prohibition affects individuals and organisations alike.

“No organisation or individual in Hainan Province shall illegally engage in token issuance and financing activities. Any so-called token financing platform shall not engage in the business of exchange between legal tender and tokens or ‘virtual currencies’, and shall not buy, sell or act as a central counterparty to buy or sell tokens.” local media reported.

In furtherance of this ban, the provincial officials say banks, financial, and payment institutions operating in the region should not directly or indirectly provide services related to virtual currencies. Additionally, virtual currency trading platforms should not offer pricing, trading, or other intermediary services.

China, with its outgrown population, is considered a significant breeding ground for cryptocurrency-related activities. The persistent calls for the ban of Bitcoin (BTC) and other virtual currencies have contributed partly to the poor performance of the global crypto market at this time. Besides the prohibition relating to financial services for stakeholders in the crypto ecosystem, the Chinese government is keen on banning mining activities. This threat has pushed many miners to put up their hardware machines for sale.

China has constantly threatened to shut down cryptocurrencies as regulators strive to adhere to environmental sustainability measures. While the fear of a ban has overshadowed the Asian country over the years, the advent of a Central Bank Digital Currency (CBDC) may account for why regulators want crypto out, as it may pose competition for the Digital Yuan.

India Consults Stakeholders Related to Cryptocurrency Ban

Indian central government and its monetary authority, the Reserve Bank of India (RBI), is reportedly taking steps to analyse the clause of the previous plans to ban digital currencies in the country.

According to BloombergQuint, the central government talks to key stakeholders to review the “Cryptocurrency and Regulation of Official Digital Currency Bill, 2021”.

Under the ongoing review, the authority considers three key aspects cited by the BloombergQuint report. The first two around whether new rules can be enacted to accommodate cryptocurrencies. The authorities are trying to explore which areas or types of crypto-related activities to permit or ban entirely.

The new approach to tackling cryptocurrencies comes after several bans that have not been implemented. Meanwhile, the threat of clamping down on cryptocurrencies persists in Asia; cryptocurrency-related activities have not really toned down. Perhaps, the new approach to tack cryptocurrencies is based on the fact that the government is not oblivious to the many local crypto dependents that the ban will impact.

Recently, when the ban on crypto surfaces, the Indian Supreme Court always revert the prohibitions. The crypto regulatory terrain in India is somewhat confusing when the government recently clarified its stance about the latest ban, pointing out that old circulars been cited by financial institutions for not providing services to crypto exchanges no longer holds.

Although other nations are also notably anti-crypto, India embraces crypto with an open mind attitude than other nations do, exploring with a welcome progression for the growth of the digital currency ecosystem in the country.

However, the clause-by-clause analysis of the crypto bill and the proposal for a new one may not be ready during the upcoming Monsoon Session of the Parliament. Nevertheless, scraping the plans to ban crypto officially will mark a new paradigm shift for the growth of crypto in India and the global ecosystem at large.