After a lengthy trial in the Supreme Court, India accepted that cryptocurrency and crypto properties were not unlawful. The Reserve Bank of India, the central bank of the world, has also confirmed that Cryptocurrency (BTC) or other virtual currencies have neither been limited.
Banning bitcoin and crypto outright, but banks face restrictions: RBI denies banning
The Economic Times of India announced that the RBI put in place ring-fence regulations to protect banks. And entities against risks associated with the exchange of bitcoin and other cryptographic properties. Because of terrorist financing issues, the central bank has confined banks to Bitcoin and crypto. The general public has not limited to commerce or peer-to-peer use of digital assets.
Nonetheless, without a complete ban, the Central Bank has raised concerns over the impact of digital assets. This has prompted India’s Internet and Mobile Association (IAMAI), focused on the 2018 RBI circular, to appeal to the Supreme Court.
The Bank also stated that it does not exclude all organizations. But just a limited group of companies not assisted by Bitcoin and other digital currencies. The RBI clarified in an affidavit:
“First of all, VCs (virtual currencies) has not prohibited by RBI in the region. The RBI has advised controlled entities not to provide service to or negotiate VCs… The RBI has been able to prevent its regulated entities from engaging in activities posing reputational. And financial risks together with other legal and organizational dangers.”
The crypto-community expects problems with the move from crypto-fiat, which has curbed growth in several countries when it comes to banking.
RBI had filed a 30-page affidavit in SC on 4 Sep 19.
The RBI has not prohibited crypto in the country. It has directed banks not provide services to those persons or entities dealing in VCs.
— BITCOIN EXPERT INDIA (@Btcexpertindia) January 21, 2020
Indian investments in virtual properties are still valid.
This year in India, regulators would gradually ease capital controls to allow citizens to transfer up to $250,000 outside India every year. This relatively low sum could allow Indians to invest in bitcoin and cryptography by exchanging third parties.
So many people were surprised the last year when I told them it isn’t illegal to invest in cryptocurrencies in India. The same was brought out by RBI in the court while defending its power for its decision of not allowing banking entities to deal with cryptocurrency traders.
— Akshay Aggarwal (@howdy_akshay) January 21, 2020
In India, the amounts of LocalBitcoins remain relatively small. Bitcoin and crypto is an advanced sector, particularly as the government has undertaken a program to mop cash and repression on a massive, gray economy. Nevertheless, the RBI was cautious and that the development of the crypto activity, thus deterring local ICOs.
Today, India hosts 57 Bitcoin nodes, which have major cryptocurrency value. The reports of a nationwide prohibition have so far been refused. Nevertheless, regulatory agencies had still concerned about the risks associated with encryption, money laundering, and personal finance implications. India has also significantly increased the BitConnect system by providing considerable wealth to regional leaders.