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- The central bank is concerned that the apex court’s verdict could pave the way of trading in virtual currencies putting the banking system at risk.
- After the circular issued from RBI on April 6, 2018, several crypto-entities had moved to Singapore and are seeking to come back to India.
- The apex court notified that the right to create something that does not disturb any existing rule is an implicit fundamental law.
According to a report, The Reserve Bank of India is preparing to file a review appeal in the higher court against the revoking the 2018 central bank circular aimed at curbing cryptocurrencies.
The central bank is concerned that the apex court’s verdict could pave the way for trading in virtual currencies putting the banking system at risk.
The scenario after 2018 circular passed
After the circular issued from RBI on April 6, 2018, several crypto-entities had moved to Singapore and are seeking to come back to India. That means that the bank will allow the users to link their accounts with crypto-platforms, enabling trading.
The circular had banned financial entities controlled by RBI from entering into any transactions in which cryptocurrencies were involved.
The apex court notified that the right to create something that does not disturb any existing rule is an implicit fundamental law. Thus, people have the authority to create a new industry of cryptocurrencies and exchanges along with the fundamental right to trade.
Adding to this the court said that the central bank hadn’t described that trading in such currencies was damaging to the business regulated by digital currency.
The founder and CEO of Crebaco Global Inc. Sidharth Sogani pointed out that the judgment supports the legitimacy of cryptocurrencies and decriminalizes the investors who had invested in various crypto assets.
The crypto-exchanges can now lawfully operate in India for fiat-to-crypto and crypto-to-crypto trading pairs. Now it depends on the bank how soon they will support the exchanges.
What was the matter?
On April 6, 2018, the RBI had issued a circular which barred RBI-regulated entities from contributing any services in terms of virtual currencies including the transfer or receipt of money in accounts related to the trade of virtual currencies.
The government and the RBI issued several warnings against dealing in cryptocurrencies and started comparing it with the Ponzi scheme. The report says that prime banks have also suspended the current account of some top cryptocurrency players for not following the RBI guidelines.
The juristic experts said that a review may not influence the status of the cryptocurrency platform.
