Lawstreet Journal

SC Lifts Ban Imposed By RBI On Cryptocurrency Such As Bitcoin

Lawstreet Journal 4 Mar 2020 8:33pm

Image courtesy: Lawstreet Journal Judiciary SC Lifts Ban Imposed By RBI On Cryptocurrency Such As Bitcoin

On March 4, 2020 (Wednesday) Supreme Court bench comprising Justice Rohinton Fali Nariman, Justice S Ravindra Bhat and Justice V Ramasubramanian, after hearing plea of the Internet and Mobile Association of India (IAMAI), lifted ban imposed by Reserve Bank of India (RBI) that barred banks from giving access to companies trading in cryptocurrencies.

"We have allowed the writ petitions," a bench headed by Justice RF Nariman said while pronouncing the verdict.

According to the RBI circular dated April 6, 2018, the entities regulated by the RBI are prohibited from "providing any service in relation to virtual currencies including those of transfer or receipt of money in accounts relating to the purchase or sale of virtual currencies".

Last year, the government committed, headed by then finance secretary Subhash Chandra Garg, suggested a hefty penalty up to Rs. 25 crore and imprisonment for up to 10 years for anyone who mines, holds or transfers or issues cryptocurrency. However, it asked the Centre to consider the launch of an official government-backed digital currency. The Centre, however, is yet to act on these suggestions. Regulated entities that were already providing such services were told to exit the relationship within three months.

Advocate Ashim Sood, appearing for IAMAI, submitted that Reserve Bank of India lacked jurisdiction to forbid dealings in cryptocurrencies. The blanket ban was based on an erroneous understanding that it was impossible to regulate cryptocurrencies, Sood submitted.

It was also argued that cryptocurrencies were not "currency" in the strict sense, and that they could be termed as a… Continue Reading...


Tagged: Cryptocurrency  
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