Cryptocurrency News

RBI Responds to RTI Request regarding Crypto Restrictions

Responding to a Right to Information Act request, the Central Bank of India – the RBI clarified that there are no restrictions levied on any bank that would prevent them to open accounts of crypto traders and companies. The RTI act is an open-act that requires transparency of information to the questions asked by the general public of the country. The request and the RTI application was registered by Harish BV who happens to be the co-founder of the local crypto exchange called Unocoin. 

In 2018, it was the RBI that released a statement restricting regulated financial organizations to deal with any organization or individuals trading in crypto. Banks had started rolling out warnings with effect to the ban orders. But after that, the ban was lifted by Supreme Court letting the financial organizations continue dealing with such entities in the future. 

The uncertainty surrounding the cryptomarkets is still very apparent because a few banks are still denying service and support to such customers. Lawyer, Mohammed Danish clarified that the Supreme Court order was not applied universally because it did not add to the orders that RBI will issue separate notifications to the bank that they had to comply with the orders. 

Hence in order to ensure that the trader’s interests remain intact and that they do not have to face uncertainty, Harish BV had filed this request on the 25th of April. The RBI got the information request as to whether banks were still prohibited to provide bank accounts to cryptocurrency companies or traders to which RBI was clear that no such prohibition exists currently. 

The banking ban was not a good sign for India’s crypto market as the companies started shifting bases to those nations where regulations were friendly. The companies were operating from India but were trading from elsewhere. Even the most established brands either had to shift or shut shop. 

But now that the RBI stance is crystal clear, the crypto market in India can flourish big time. The acceptance would increase and that would mean exposure to about 1.35 billion potential Indian traders and users. 

Image Source – CompareRemit

Supreme Court lifts the ban on Crypto dealings in its landmark judgment

On Wednesday, Supreme court benched by Justices Rohinton Nariman, Aniruddha Bose and V Ramasubramanian delivered a judgment lifting the ban imposed on cryptocurrency trading which RBI had imposed. 

Since 2013, the RBI had been warning cryptocurrency dealers and users to avoid the use of cryptocurrencies so that the payment systems of the country are not compromised. It had administered a blanket ban on various crypto dealings which became effective from July 2018. RBI warned the banks to withdraw all banking transactions with business entities and individuals who are dealing in the currency. RBI intended to secure the financial foundations of the country which might shake up the entire system. 

The Internet and Mobile Association of India (IAMAI) was rooting for a lift on the ban based on the several petitions received from different stakeholders. IAMAI was of the opinion that cryptocurrency did not come under the category of currency because it is more of a commodity. It outrightly asserted that RBI is not authorized to impose any ban especially when there is no definite law restricting it. 

IAMAI – a non-profit body has some eclectic names in its membership namely Yahoo! India, Apple, eBay, Unocoin and Etsy and is a body representing the concerns of industry customers, investors, and shareholders. 

In the landmark ruling, the Justices ruled that RBI’s bid to ban the currency is inordinate. Arguments also gesticulated that RBI has-proclaimed it had the right to intervene and that crypto is a digital exchange currency, but IAMAI’s counsel Ashim Sood argued that it is a double-edged sword with it acting as a medium of exchange and also a valued commodity. He argued that RBI had no area of authority to impose the ban on firms that are providing services to businesses powered by cryptocurrency. 

Ever since Crypto dealings began in India, it has been facing many hurdles. The ruling by the Supreme Court might be the unburdening of these hurdles. In the fall of 2019, the government prohibited the drafting of the bill banning the use of Crypto in India. Earlier it envisioned a big dream of digitizing Rupee and Crypto was in its way but it seems like the ruling is slowly unlayering crypto and its potential in the future. 

Photo Credit – Photo by Vikas Sawant from Pexels

Blockchained India Announces Mass Adoption Plan for Enterprises In India

Akshay Aggarwal, one of the co-founders of Blockchained India, an open blockchain enthusiast community, announced its mass adoption plan of Web 3.0 enterprises in India. In the announcement, he said that the vision entails transforming the enterprises of the future.

“Platforms for various kinds of preneurs like Flipkart, Makemytrip and Indiamart will be the new enterprises. Minds aspiring to become the next mover and shaker are working today to create platforms of tomorrow.”

The enterprises of today come with various flaws and one of those being ownership and accountability. Giving an example of one of the platforms, he said more of such problems would surface, and a strike will be needed to maintain a balance in the interests of all the stakeholders.

“A few years back, I had come across this case where a friend had ordered a phone through the online marketplace only to realize at the time of delivery; there was only a stone delivered inside the phone case. Much to his dismay, the platform team brushed off responsibility towards the seller justifying itself as only the mediator in the whole interaction.”

The platform enterprises powered by centralized ecosystem must require a gateway to solve conflicts before they start conflicting with stakeholders’ interest. Decentralization can help tackle the problems by bringing all the stakeholders on a decentralized network with creating a new platform with monopolistic tendencies.

Aggarwal emphasized blockchain’s usefulness in privacy focussed permissioned use cases and that this initiative will enable them to penetrate ahead into the industry. Stating further, he pointed out that many people still don’t believe in cryptocurrencies, and this step will evolve their belief and get it aligned with the created opportunities.

India is increasingly becoming conscious of blockchain technology, and firms are ready to experiment with it. However, the Indian regulatory bodies aren’t paying attention to decentralization or smart contracts, and as a result, Indian technological innovation is progressing very slowly.

Amid the recent hearings by Supreme Court on cryptocurrency ban, RBI disclosed that it didn’t ban crypto. They categorized virtual currencies as a financial instrument and prohibited financial entities from dealing in it. We can only see their frustration while trying to desperately justify their decision. Good times are coming, crypto winter seems to have passed!

Learn more about Blockchained India’s latest event – Blockchain Bytes featuring The Open Application Network on the 15th of February 2020.

Indian Government may Launch Crypto Tokens for Financial Transactions in the Country

The government in Indian may launch crypto tokens for financial transactions in the country. This is happening at a time when cryptocurrencies had been ban in the country sometime back.

FINANCE MINISTRY TO UP A COMMITTEE SET UP

The finance ministry set up a committee to work under the chairmanship of the Department of Economic Affairs secretary. The committee is in place to work on regulations and a road map that will allow somhe crypto assets to be used in India. The proposal will be tabled in Parliament once it is ready.

Mr. Subhash Chandra Garg who heads the committee is quoted stating:

“The committee is studying the possibility of using cryptocurrencies or crypto technology (distributed ledger technology) for financial transactions and also what kind of regulations are needed for that…[while] the currency is totally banned, the committee is discussing its other usage and how it can be mainstreamed in India.”

DEPARTMENT OF ECONOMIC AFFAIRS ISSUED SEVERAL WARNINGS

The Department of Economic Affairs issued several warnings to the citizens of India warning them about the risks of cryptocurrencies which they consider a Ponzi scheme. The Reserve Bank of India on the other hand issued a ban to financial institutions dealing with crypto related businesses.

Mr. Garg however believes that the Indian government may decide to allow crypto tokens in the country. He was quoted saying the following:

“One will need to pay physical money to buy a token which could be stored as a code in any basic mobile feature phone. It can even be used for remittances. So, it is easy to implement from technology as well as regulatory point of view. But in case of cryptocurrency, one needs to allow it as a legal tender first.”

The committee will also analyze the prospects of the government legalizing cryptocurrencies and also the consequences that it bears.

Remember folks, Crypto is comin!

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Interested in other cool crypto posts….check out Estimated Bitcoin Carbon Footprint and Why Peter Schiff is Wrong About Bitcoin.

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