- The Supreme Court of India recently ruled against the Reserve Bank of India’s ban against banks from catering to cryptocurrency firms.
- The RBI ruling stated that a blanket ban on new and upcoming technologies isn’t in the best interests of the financial future of the country.
- The initial ban from the RBI was under concern that cryptocurrencies might grow very quickly with unregulated coins saturating the market.
The Supreme Court of India recently ruled against the Reserve Bank of India’s ban against banks from catering to cryptocurrency firms, after nearly a year of protesting from the community.
But this might not be the last hurdle in the way before the country gets its feet wet in the crypto industry, as there is yet a bill on cryptocurrency regulation and banning to be passed by the government that will decide the future of digital assets in India.
Regulations are the biggest hurdle that cryptocurrencies will have to overcome in India as per Siddharth Mahajan at Athena Legal. The RBI ruling stated that a blanket ban to new and upcoming technologies isn’t in the best interests for the financial future of the country and that regulatory measures can be considered to combat concerns against cryptocurrencies instead.
The Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019 is the bill that will be taken into consideration at the Parliament, which will decide the future for cryptocurrencies.
If regulations are put into place, there will be divisions made between the different types of digital assets like currency tokens, equity tokens, commodity-backed tokens (stablecoins), and utility-providing tokens. According to some industry experts, commodity-backed tokens and equity tokens should be exempt from regulations and taxes.
Still, utility tokens should be verified on whether they serve any purpose with some degree of regulation and currency tokens should be monitored with higher regulation to make sure it is not being used for the wrong purposes.
The initial ban from the RBI was under concern that cryptocurrencies might grow very quickly with unregulated coins saturating the market and disrupting the financial ecosystem.
As much as this can be quite damaging to the economy, many believe that cryptocurrencies should be allowed to nurture for a while without any underlying regulations before light constraints are placed.
So the industry can grow properly before having to comply with rules. Cryptocurrencies hold great potential in being a viable replacement to money and a strong financial instrument if implemented correctly in a large country like India.
Also, the utility of crypto in India is massive as most financial services don’t reach the lower classes, and crypto makes finances cheap and accessible to everyone while providing additional benefits.
The lifting of the RBI ban is sure to give a slight jumpstart to cryptocurrency operations in the country once again. Still, it seems highly unlikely that crypto will replace the entire financial system or even run on par anytime shortly.