India’s Supreme Court Upholds Ban on Crypto-Related Businesses
Today, the Reserve Bank of India’s (RBI) ban on providing services to crypto-related businesses officially takes effect. Despite efforts by companies to challenge the ban, India’s Supreme Court, under the leadership of Chief Justice Dipak Misra, has ruled in favor of maintaining the ban.
The ban was initially announced in April 2018, sparking legal battles between financial institutions, cryptocurrency exchanges, and the RBI. Despite ongoing efforts to overturn the ban, the Supreme Court’s decision on 3 July solidified the implementation of the ban on 6 July, leaving many companies scrambling to adapt.
Rashmi Deshpande, associate partner at Khaitan & Co, expressed concerns over the impact of the ban, stating, “This is a significant setback for cryptocurrency trading platforms and individuals holding cryptocurrency. With banking channels restricted, most cryptocurrency transactions will now have to be conducted in cash or face limitations.”
One of India’s leading cryptocurrency exchanges, Zebpay, has already issued warnings to its customers regarding potential withdrawal limitations. The company cautioned, “If you are holding rupees or depositing funds in Zebpay, there may soon be restrictions on withdrawal requests. Proceed with caution and understanding of the risks involved.”
As reported by Unhashed, the RBI has emphasized security concerns and price volatility associated with cryptocurrencies in an attempt to sway policymakers against supporting the industry. With the ban now in effect, there are fears that cryptocurrency trading may shift to unregulated black market channels.
EU Addresses Challenges of Virtual Currencies
In response to the global debate surrounding virtual currencies, the European Union recently released a comprehensive paper titled Virtual Currencies and Central Banks Monetary Policy: Challenges Ahead. The 33-page document emphasizes the need for regulations while acknowledging the benefits and risks posed by cryptocurrencies.
The EU paper highlights the increased anonymity and data security offered by virtual currency transactions, noting the limited interference by public authorities. It also argues against extreme measures such as outright bans, stating that policymakers and regulators should engage with the cryptocurrency industry rather than ignore or prohibit it.
As the cryptocurrency landscape continues to evolve, governments and financial institutions worldwide are grappling with the complexities of regulating this emerging asset class. The decision by India’s Supreme Court to uphold the ban on crypto-related businesses reflects the ongoing challenges and debates surrounding the future of digital currencies.