Industry players and experts have welcomed the Supreme Court judgment on Wednesday that has lifted the ban by Reserve Bank of India on trading in cryptocurrency, saying the move will boost innovations and provide credibility and legitimacy to such transactions. But the way forward with a less-than-enthusiastic government and RBI will have to be worked out.
‘A big relief’
The Internet and Mobile Association of India (IAMAI), which along with others, had approached the Supreme Court in 2018 against the RBI circular, said this will be a big relief as exchanges can now work with regulated entities for facilitating banking transactions.
“IAMAI is also looking forward to working jointly with the RBI and Government of India on a constructive policy framework for cryptocurrencies in India to support innovation, along with suitable measures to keep the risk under control,” it said in a statement.
Earlier in the day, Nasscom also welcomed the ruling and said in a tweet: “We believe that banning tech is not the solution, a risk-based framework must be developed to regulate and monitor cryptocurrencies and tokens.”
Sathvik Vishwanath, CEO and co founder of cryptoasssets and blockchain company Unocoin, told BusinessLine that the RBI circular had tied up the hands of the industry. “The Supreme Court ruling, which comes 22 months after the RBI circular will, help now help players reach the standards of peers in other countries, and will also help clear a lot of misconceptions about the cryptoasssets industry,” he said.
Nischal Shetty, Founder and CEO, WazirX, and member of the blockchain and cryptocurrency committee (BACC) of IAMAI, said: “This positive judgment will open doors to massive crypto adoption in India. It proves that we can now innovate, and the entire country can participate in the blockchain revolution.
Since the RBI circular, a number of exchanges had also shut shop or shifted abroad, many of which may now return.
“It is never too late...This landmark judgment from the Supreme Court has restored our members’ faith in the judicial system, and they will restart their operations soon,” said IAMAI in response to a question from BusinessLine.
However, while industry bodies and experts sound optimistic, it remains to be seen what stance the Finance Ministry will take.
“Virtual currencies and crypto currencies are not legal tender,” has been an oft-repeated caution by the Finance Ministry and the RBI. Last year, an inter-ministerial committee set up by the government, had suggested banning private crypto currencies and had also proposed a draft Bill, ‘Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019’, which was placed for public discussion but did not see further movement.
There is also a view to balance innovation and regulation. “The challenge ahead would be to strike a balance between innovation and the need to regulate these newer technologies, which are not always used for lawful activities. The Japanese regulations from April 2017 would be a helpful example of where to start the Indian journeys,” said GV Anand Bhushan, Partner, Chennai Head, General Corporate, Shardul Amarchand Mangaldas and Co.