The Supreme Court of India lifted the Reserve Bank’s ban on cryptocurrency trading, which lasted two years. The Reserve Bank introduced it in April 2018, which prohibited any financial institutions from providing “services related to virtual currencies”.
The Supreme Court took this decision in response to a class action lawsuit from several cryptocurrency exchanges of the country. Now the world’s third largest GDP economy can use cryptocurrencies as legal financial instruments. At the same time, local publications note that part of the Indian government still opposes cryptocurrencies.
For example, less than a year ago, in July 2019, a working group under the Government of India recommended tightening the ban on cryptocurrencies. According to their plan, the bill provided for real punishment for their use – it could be large fines or imprisonment of up to 10 years.
The Internet and Mobile Association of India said the lifting of the ban is a necessary step to combat the artificial fencing of cryptocurrencies from the country’s financial system. They also stated that Bitcoin cannot be regarded as a full-fledged currency because it does not exist in physical form and cannot be centrally controlled by the government.
The Times of India notes that the influence of the state on cryptocurrencies will increase, and the project itself will receive a “second wind”. According to them, the Indian authorities intend to participate in the digital asset market and compete with decentralized financial instruments.