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March 5, 2020

Cryptocurrency scores major legal victory in India

The Supreme Court of India has lifted the restriction imposed on the trading of cryptocurrencies by the country’s central bank.

In April 2018, the Reserve Bank of India (RBI) barred financial institutions from offering their services to anyone trading in virtual currencies.

Institutions regulated by the central bank were mandated to end their relationship with institutions and individuals who offer such services within three months.

Crypto exchanges, startups, and industry bodies later challenged the decision in the top court.

A three-judge bench of the Supreme Court headed by Justice Rohinton F. Nariman concurred with petitions and shot down the curb imposed by the RBI.

In its defense, RBI said it opposed all forms of payments that could “undermine the integrity” of the central banking system.

It argued that although there was no law that formally prohibits cryptocurrencies trading in India, it had regularly cautioned against inherent risks of trading in digital currencies.

Cryptocurrency exchanges in India welcomed the judgment.

WazirX founder and CEO Nischal Shetty said: “This positive judgment will open doors to massive crypto adoption in India. It proves that we can now innovate, and the entire country can participate in the Blockchain revolution.

“With over one billion population, the Indian market is a sleeping giant. I’m confident that this judgment will have positive impact on the global crypto ecosystem.”

Zebpay, a prominent exchange, tweeted that its servers went down hours after the verdict because the number of people logging on “exceeded our biggest estimates.”

The verdict paves the way for Indian banks to deal with digital currency.

However, all cryptocurrency firms will be expected to adhere to regulations similar to the majority of financial institutions.

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