Author Topic: India Makes U-Turn on its Crypto Ban  (Read 83 times)

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India Makes U-Turn on its Crypto Ban
« on: August 13, 2018, 09:04:09 am »
Weeks after the Reserve Bank of India (RBI) issued a circular banning all banks and financial institutions from offering services to cryptocurrency businesses in April, its stance seems to be softening.

During a court hearing of a petition seeking the legalization and regulation of the cryptocurrency industry, the Reserve Bank of India told the Supreme Court that it is necessary to regulate bitcoin.

Reported Financial Express:

Gopal Subramanium, appearing for the petitioners... argued that RBI's circular that mandated banks, e-wallets, and payment gateway providers to withdraw support for cryptocurrency exchanges and other businesses dealing with virtual currencies in India was "baseless". "In today's tech world, transactions are done online and you need banks for that. This issue should concern the government," he argued.

Crypto regulation has “immense policy dimensions”
In response, the RBI, through senior counsel Shyam Divan, told the Supreme Court that cryptocurrency left unregulated will encourage illegal transactions and also impact the international flow of funds. He said:

It has immense policy dimensions.

CCN reported that the hearing was also attended by India’s attorney general KK Venugopal in attendance, “signifying the importance of the petition and case overall”. CCN reported:

The RBI’s softening stance, after years of repeated public warnings [against crypto], coincides with the timing of a final draft of regulations developed by an inter-governmental committee tasked to formulate a policy for the sector in the country.

Rumors are that Indian authorities are looking to classify cryptocurrencies as commodities, a move that would see cryptocurrency trading markets regulated similarly to traditional mainstream financial markets.

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