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Prashant Jha
Jan 21, 2020
by Prashant Jha

RBI Admits There is No Bitcoin Ban in India in an RTI Response

RBI
The Reserve Bank of India (RBI) released a circular in 2018 declaring a banking ban on crypto service providers, which had quite a devastating impact on the budding Indian crypto ecosystem. As a direct result of the circular many crypto exchanges and crypto service providers had to either shut their operations or relocate. The impact of the circular was even more devastating due to subpar reporting in the local media which wrongly interpreted the banking ban as a complete blanket ban and a majority of the population are still not sure whether Bitcoin or any other cryptocurrencies are banned or not.

RBI's decision was later challenged by the Internet and Mobile Association of India (IAMAI) in the Supreme Court calling it unconstitutional and outside their jurisdiction. The case is still going on in the supreme court where the prosecution has addressed that the decision to impose any kind of ban on digital assets falls under the jurisdiction of Security and Exchange Board of India (SEBI). 

RBI Admits Bitcoin is not Banned In India

IAMAI also filed an RTI (Right to Information) query asking whether Bitcoin and other cryptocurrencies are banned in India. RBI has responded to the RTI clearing that there is no ban imposed on cryptocurrencies, and only regulated entities like bank were asked to restrict their service owing to the security concerns surrounding digital assets, reported The Economic Times

The RTI query also revealed that in 2018 while discussing digital assets, it was proposed that Initial Coin Offerings (ICOs) must be completely banned while virtual currency asset funds must not be allowed to function in a legal jurisdiction. RBI also claimed that they are not against any technological innovation but they also have to ensure security and safety of citizens against potential frauds while maintaining the financial sovereignty of the state.

The RBI vs IAMAI crypto case has been going on in the supreme court since 2018 and has gained some momentum in terms of the valuable argument being presented from both sides.  The case is being seen as pivotal for the crypto space as it will play a pivotal part in deciding what role India plays in the next fintech revolution.

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RBI Admits There is No Bitcoin Ban in India in an RTI Response
Prashant Jha
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

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