In recent developments, the Reserve Bank of India has said that although crypto-assets cannot be offered by regulated entities in the country, it doesn’t mean that India has completely banned digital assets.
Banned or Not Banned?
According to an article published in The Economic Times, the Reserve Bank of India has stated that it has not banned cryptocurrencies like Bitcoin but had rather only ‘ringfenced regulated entities like banks from risks associated with such virtual instruments’.
The statement was made by the bank in response to a petition filed in the Supreme Court of India by the Internet and Mobile Association of India (IAMAI). The petitioners wanted the bank to reconsider its circular issued in 2018 which barred regulated entities from dealing in cryptocurrencies.
IAMAI is an association whose members include crypto exchanges. The argument put forth by them says that by blocking access to cryptocurrencies, the Reserve Bank of India has hindered a ‘legitimate business activity’.
In the reply petition, the Bank has maintained that it has not prohibited virtual currencies in the country—
“The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs… The RBI has been able to ringfence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks…”
These risks include activities like terror financing and money laundering.
Crypto Still Fighting for Acceptance
While India’s central bank stance might be considered not too harsh, cryptocurrencies are fighting for acceptance around the globe in countries that have adopted a doubtful outlook towards it. In countries like Qatar, all kinds of crypto-related trading services remain banned even with the approaching end of the decade.