Supreme Court lifts curbs on cryptocurrencies, junks RBI circular

The Supreme Court, on Wednesday the 4th March 2020, set aside the Reserve Bank of India’s (RBI’s) April 2018 circular asking banks and entities the central bank regulated to stay away from dealing in crypto currencies, including Bitcoin.

The judgment said the circular had been “set aside on the ground of proportionality”. This has given a major relief to exchanges dealing in these crypto currencies. It opens a window for developing a market for crypto currencies, which are formally traded in derivatives markets in the US, with CME allowing trade in them.

Crypto currencies are virtual currencies and are a digital representation of value. They can be digitally traded and can function as a medium of exchange and/or a unit of account and/or a store of value, though they do not have the status of legal tender.

The Centre is yet to implement a regulation or put in place a monitoring mechanism on virtual currencies. Last July, an inter-ministerial panel set up by the government on virtual currencies had proposed banning of private cryptocurrencies, barring any digital currency issued by the government by enacting a law and imposing fines and penalties, including jail-term, for trading in cryptocurrency.

Read more on ; Supreme Court lifts curbs on cryptocurrencies, junks RBI circular & SC allows cryptocurrency trading, quashes RBI ban