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SC annuls RBI curb, frees trade in cryptocurrencies

The Supreme Court on Wednesday set aside an April 6, 2018, circular of the Reserve Bank of India (RBI) that prohibited banks and entities regulated by it from providing services in relation to virtual currencies (VCs).

“Till date, RBI has not come out with a stand that any of the entities regulated by it namely, nationalised banks/scheduled commercial banks/cooperative banks/NBFCs, have suffered any loss or adverse effect directly or indirectly, on account of VC exchanges,” a Bench comprising Justices Rohinton Nariman, Aniruddha Bose and V. Ramasubramanian observed in a 180-page judgment.

Justice Ramasubramanian, who authored the ruling, found the RBI circular “disproportionate” with an otherwise consistent stand taken by the central bank that VCs were not prohibited in the country. Besides, the court found that the RBI did not consider the availability of alternatives before issuing the circular.

Again, the April circular was issued despite the fact that the central bank could not quote a single instance when VC exchanges “actually impacted entities regulated by RBI”.

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