India's 2018 ban on banks servicing traders and businesses dealing with cryptocurrencies has been overturned by the country's Supreme Court, opening the door for bitcoin and Facebook’s Libra.
A three-judge Supreme Court bench, which was headed by Justice Rohinton F. Nariman, struck down curbs set by the country’s central bank two years ago. The Supreme Court decision covered two writ petitions, one from the Internet and Mobile Association of India (IAMAI) and a second from a collection of crypto asset exchanges, traders and crypto startups. In the 180-page ruling, the Supreme Court agreed with the petitioners and deemed the curbs to be unreasonable.
“Now there is an opportunity for India to catch up in the digital finance innovation race, and create innovative solutions to digitize the Indian economy. The potential is innumerable. We can expect bitcoin and other major currencies to receive a shot in the arm in the coming days as a new investor and innovator market opens up,” said Jamal Hassim, founder and CEO of Bolt.Global, a cryptocurrency platform and provider of Bolt Tokens.
According to the IAMAI website, its membership includes Facebook India, Apple, Amazon, Adyen, First Data (Fiserv), FIS/Worldpay, DBS Bank of India, Airbnb, Netflix, Pine Labs, ICICI Bank, MoneyGram, Oracle, Strip, Uber, Visa, PayPal, Microsoft and dozens of other major organizations based in India and internationally.
The ruling examined an official April 5 statement and a follow-up April 6 circular issued by the Reserve Bank of India (RBI) that directed all entities it regulates, including banks and other financial services companies, not to deal with or provide services to any individuals or businesses dealing with or settling virtual currencies, and to exit any existing relationships with such individuals or businesses.
While the RBI 2018 circular was not an outright ban of cryptocurrencies, it effectively blocked any Indian bank, consumer or businesses in trading in cryptocurrencies and converting them for goods, services, or conversion into fiat currencies such as the Indian Rupee or other foreign currencies.
So consequential was the ruling that when Facebook announced its new Calibra digital wallet services in 2019, it commented that it would not be introducing the Libra cryptocurrency in India due to the existing RBI restrictions.
Bloomberg reports that the Indian Supreme Court is separately hearing another case in which it will decide on regulations for digital currencies, and that the overturning of the bank ban makes the case for strict rules unlikely.
