New Delhi: In a crucial judgment, the Supreme Court on Wednesday lifted the curbs on exchanges in cryptocurrency imposed by the Reserve Bank of India. Delivering the judgment, the apex court held that the RBI’s circular preventing bans from dealing in transactions involving cryptocurrency was ‘unreasonable and disproportionate’. Also Read - Cryptocurrency in India: Supreme Court to Deliver Judgement on Pleas Challenging RBI Circular Tomorrow
Trading in cryptocurrencies now will be allowed, the top court ruled. Also Read - Cryptocurrency: Inter-ministerial Panel Recommends Ban in India, Penalty on Default
A three-judge bench of the apex court, headed by Justice RF Nariman, and also comprising Justices Aniruddha Bose and V Ramasubramanian pronounced its judgement in the case. Also Read - Donald Trump does not consider Cryptocurrency as money; blasts Bitcoin, Facebook Libra
In a circular issued on April 6, 2018, RBI had ruled that no entities under its purview shall deal in bitcoins or provide services for facilitating any person or entity in dealing with or settling the same.
However, the ban was challenged in the Supreme Court by the Internet and Mobile Association of India and a few other stakeholders, who argued that cryptocurrencies were more like ‘commodities’ rather than currency, adding that the RBI did not have the jurisdiction to regulate the field.
The petitioners also argued that the RBI’s circular taking cryptocurrencies out of the banking channels would deplete the ability of law enforcement agencies to regulate illegal activities in the industry.
Senior Advocate Shyam Divan, appearing for RBI, disagreed and said that it was a mode of digital payment, which the RBI had the power to control.