Despite the uncertainty regarding a possible cryptocurrency ban in India, the Reserve Bank of India (RBI) officially stated that no ban will happen any time soon. The central bank argues that while regulated entities cannot provide cryptocurrencies in India, the decision does not mean that digital assets are banned in the country.
Citing a document that the RBI sent to India’s supreme court in September last year, the Economic Times of India published an article on Jan 21 in which it said:
“Firstly, the RBI has not prohibited VCs (virtual currencies) in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs”
Cryptocurrency ban uncertain since 2018
The cryptocurrency drama in India started as early as April 2018, when the RBI shared a statement regarding crypto regulation. The statement led to the central bank limiting services to individuals who trade and invest cryptocurrencies. At the time, the RBI said:
“In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs.”
However, the popularity of cryptocurrencies in India resulted in several entities fighting against regulation. A non-profit group called ‘Internet and Mobile Association of India’ (IAMAI) which strives for digital growth made a petition at the time which sought to reverse the decisions made by the nation’s central bank.
The petition later on lead to the ongoing Indian Supreme Court hearing, at which the RBI promised to share a clarification regarding its stance on Jan 21. While the RBI stated that no cryptocurrency ban is in effect, the current regulatory environment prevents crypto and blockchain business from sprouting. Nevertheless, the supreme court seems to be on the side of the IAMAI.