- The so circular indicated all the financial institutions to get separated from all virtual currencies dealings within three months.
- The Government requires at least five years passing a law banning the banking sector from providing services to the crypto-industry.
- At present, no regulator can fully understand or develop a frame-work for crypto-governance.
This March has proved as a boon to the cryptocurrency market. In its first week, the higher court has disaffirmed an RBI circular of 2018 that barred Indian banks for providing their services to crypto businesses.
Is it necessary to revisit the crypto exchange?
The so circular indicated all the financial institutions to get separated from all virtual currencies dealings within three months. This resulted to shift all the crypto-ecosystem to shift from India to Singapore.
Per the current scenario, with the latest verdict of SC, all migrated firms are planning a comeback. The RBI is, on the other hand, seeking a petition against SC orders, but that response alone is not enough.
The Government requires at least five years passing a law banning the banking sector from providing services to the crypto-industry.
Till that time Indian baking industry was passing through NPA menace and had reconstituted itself into a tangible and capable market-driven element that is well operated and is nondependent on the tax-payers money.
What parliament can do in this matter?
The following RBI 2018 circular case was challenged by The Internet and Mobile Association of India (IMAI) in the Supreme Court on behalf of several crypto-exchanges.
As per their argument, there was no law banning the trading of cryptocurrencies passed by the parliament. It was a valid trading activity under the Constitution. Thus, the RBI could not stop them to access banking channels for carrying out such business.
Earlier to RBI’s 2018 circular, one could trade Bitcoin easily through Zebpay and other crypto exchanges. Also, one can freely use their debit or credit card for the former purpose. This dashingly got popular in the global market as Bitcoin was measured as an opportunity for Indians to get rich quickly in a nation.
The Government has mixed feeling as some called it a financial innovation whereas others alerting against it during 2018. The banking problems have just started to surface and the huge financial scam and failure of NBFC majors were yet to come.
Hence, Finance Minister Mr. Arun Jaitley did not introduce this bill into the parliament but left it to RBI’s for further concern.
At present, no regulator can fully understand or develop a frame-work for crypto-governance. As a reason, the code developed in Bitcoin and other cryptocurrencies are only understood by the technologists and not by the financial regulators.
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