04 Mar 2020 Jane Whitmoore
India Lifts The Ban On Cryptocurrencies
After setting a ban on trading with cryptocurrencies on April 6, 2018, the Reserve Bank of India (RBI) reverted their decision and is now lifting the ban, as the Supreme Court of India ruled that RBI’s ban is acting against India’s constitution.
The ruling means banks in India have unrestricted access to digital currencies, which would ease the process of trading on crypto exchanges. Prior the ban, crypto exchanges couldn`t receive help from Indian banks, making exchanges` operations very difficult.
Shortly after the 2018 ban, India’s Internet and Mobile Association (IAMAI) acted with a case filing against RBI’s actions. One of IAMAI’s key points was that cryptocurrencies are financial instruments, just like casino chips, and they must be treated this way by the RBI. However, the ban lift opens the gates for international players to enter the Indian economy. Ripple’s CEO Brad Garlinghouse stated that despite having India high in the list of potential expansion countries, “the lack of regulatory clarity made us not to consider India at this moment.”
One of IAMAI’s top arguers, Ashim Sood, stated that the RBI has the power to oversee and regulate India’s monetary policy, “but the RBI has no power in banning cryptocurrencies.” Sood clarified that cryptocurrencies should be treated like financial commodities, like silver and gold. “As with sterling metals, cryptocurrencies aren’t actual currencies, rather than a way to store value,” Sood explained.
Benson Samuel, Director of Technology at crypto startup Tokenyz Ventures, commented on the news, noting that the infrastructure behind India’s crypto future, as well as the community, awaited this moment over the past couple of years.
“We should see a lot of companies that shut down operations due to RBI’s ban, to resume functionality, as well as an increase in activity in India’s crypto sector,” Samuel added.
However, Ashim Sood admitted that cryptocurrency exchanges keep suffering from illicit behavior and hacker attacks. In 2019 Japanese exchange BitPoint got stung with $30 million worth of cryptocurrencies, while the biggest crypto exchange to date, Binance, lost almost $40 million worth of cryptos. Sood suggests a governmental regulatory framework that can help “patch up” possible vulnerabilities, as it is the case with Japan’s regulatory help on BitPoint.
“We can say, without a doubt, that cryptocurrencies are not only the future of money as we know them but also recognize cryptos as a major force in mainstream finance and banking nowadays,” said the founder and CEO of financial consultancy company deVere Nigel Green.
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