As of March 4, 2020, the Supreme court of India eliminated the ban on cryptocurrency trading. It is considered to be the most awaited day for all the crypto traders in India. Its a boon to all crypto entrepreneurs in India to begin with their crypto journey sooner. Even though the global data of crypto users from India accounted for only 3% before the RBI ban, it is expected to grow more in the forthcoming years.
As Indians give utmost value to their assets, it's believed that the cryptocurrencies will become a major source of the value storage system. Not only that, with many more companies such as Paypal trying to monetize Cryptocurrency for daily use, there will come a time where digital currencies will be used on a daily basis in India.
Let's get into the details of the famous crypto verdict 2020 that set a crypto relief in India.
2018 Circular of the RBI
In 2018, the Reserve Bank of India (RBI) pursued to prevent banks and institutions from dealing in digital or virtual currencies. To paraphrase, the RBI forbade banks from extending a range of services to facilitate individuals and entities in dealing with cryptocurrencies. Those services included- maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing cryptos and transfer/receipt of money in accounts relating to purchase/sale of digital currencies.
Why the case landed in the court?
Since many other traders and Investors questioned this proportionality, they joined with the trade body, the Internet and Mobile Association of India along with several crypto exchanges to file a petition.
Why the judgment favored petitioners?
The judgment was based on the reasoning that "the RBI has not found that the activities of virtual currency exchanges had adversely affected the entities it regulated. This, even as virtual currencies have not been banned in the country."
Since there is no written law under the constitution stating that the trading of cryptocurrencies is said to be illegal and to be banned, the court stated it as a "legitimate" business activity under the constitution.
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