RBI has no authority to ban cryptocurrencies, says Internet and Mobile Association of India (IAMAI)


  • IAMAI told the Supreme Court that RBI's action against private businesses in the form of a circular is illegal.
  • IAMAI says RBI banned cryptocurrencies on "moral grounds" and that it is arbitrary, unfair and unconstitutional.

Earlier, there were talks about a Reserve Bank of India (RBI) circular regarding the prohibition of cryptocurrency-related services offered by banks and other financial institutions. However, the Internet and Mobile Association of India (IAMAI) told the Supreme Court that the RBI did not have the authority to issue a ban.

"RBI cannot step out of its powers as set out in the Banking Regulation Act. Therefore, its action against private businesses in the form of a circular is illegal," IAMAI counsel Ashim Sood said.

He also highlighted that there was no research undertaken by the central bank before issuing the ban. Advocate Sood informed the court about definitions of 'virtual currency' and cited multiple sources to show that different types of virtual currencies exist. He stated that the circular is vague as it does not define virtual currencies. 

In support of his petition, the counsel cited various judgments and cited the acts of regulations taken up by the G20 nations like the US. According to the April 6 circular last year, the institutions regulated by the RBI are banned from "providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to the purchase or sale of virtual currencies."

IAMAI revealed that the RBI had banned crypto on "moral grounds" as no research was conducted to study the effect of these virtual currencies on the economy. The association also said that the blockchain technology adopted in these virtual currencies was not disputed, and therefore, a ban was "arbitrary, unfair and unconstitutional." The court has listed the case for next Tuesday for further hearing.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Cryptos feed

Latest Crypto News & Analysis

Editors’ Picks

BTC/USD freefalls from $7,300, breakdown to $6,500 still looms

Bitcoin price rejection from levels around $7,300 failed to find support at $7,000 and $6,800 respectively. The price is doddering at $6,773 amid a building bearish momentum. However, the RSI and the MACD have remained positive.

More Bitcoin News

XRP/USD bulls in control as they look to conquer $0.1876 resistance line

XRP/USD went up from $0.1785 to $0.1794 in the early hours of Friday. In the process, the buyers managed to stay in control for the fifth straight day as they broke above the bullish pennant structure. 

More Ripple News

Ethereum Price Prediction: ETH/USD focus shifts $160 despite resistance at $150

Ethereum is slightly in the green on Friday following a relatively bullish week. It calls for celebration among the bulls after the price action achieved the short term goal of stepping above $140 resistance.

More Ethereum News

EOS Price Analysis: EOS/USD remains bullish despite charting death cross pattern

EOS/USD has gone up from $2.295 to $2.318 in the early hours of Friday as it continues to consolidate itself within the pennant structure. In the process, the buyers managed to chart a hattrick of bullish days ...

More EOS News

BEST CRYPTO BROKERS/EXCHANGES

Bitcoin Weekly Forecast: Coronavirus will either kill Bitcoin or make it stronger

Bitcoin is about to finish the second positive week in a row. The first digital coin has recovered from $5,680 and came close to psychological $7,000 during the week.

Read the weekly forecast

BTC

ETH

XRP