Not So Quick
Earlier this week the Supreme Court of India made waves in the world of cryptocurrencies, as they overturned a blanket ban, imposed by the Reserve Bank of India, on the industry.
While many were quick to celebrate this decision – with various exchanges immediately reinstating services – it should be important to keep expectations in check.
Indian news outlets are reporting that the Reserve Bank of India is obviously unsatisfied with the decision from the Supreme Court. As such, they will be filing for a review of the decision, in hopes of reinstating their ban.
RBI Ban Reversal
The initial ban was first imposed in mid-2018 by the RBI. At the time of the ban, the RBI noted that it came after multiple warnings to the public on what they perceived were dangers associated with virtual currencies. The following is a brief excerpt from their ban, which illuminates the scope of its reach.
“…it has been decided that, with immediate effect, entities regulated by the Reserve Bank shall not deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs. Such services include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/sale of VCs.”
The decision for a reversal, while made on a variety of factors, came down to a few key points:
- A complete ban was ‘disproportionate’ to perceived risks by the RBI
- RBI was unable to prove that any harm was endured by regulated banks
- The RBI is to regulate, not prohibit
When perusing the Court’s recent documentation surrounding their decision, it is interesting to note that a heavy emphasis in the proceedings came from previous, similar, decisions made by the European Union Parliament. The following quote from the European Union Parliament was used as a point of…