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

Altcoins push hard not waiting for a Bitcoin reaction

The Altcoin market has only needed one business day to see prices rise sharply again. Bitcoin, still, has adopted the anchor function and for the moment is giving up the battle for the $10000.

More Cryptocurrencies News

NEO/USD bullish following Binance Futures support

NEO is in the green on Monday during the European trading session. The bullish momentum is taking action after a couple of days of the bulls enduring battering from the bears.

More NEO News

ETH/USD tug of war at $270 intensifies as $280 beckons

Ethereum managed to stay above the support at $240 during the bearish Monday. Also contributing to the support was the long term ascending trendline. The recovery from the support has been steady enough to hit levels slightly above $270. 

More Ethereum News

XMR/USD bulls make a comeback after finding support on the SMA 20 curve

XMR/USD bulls jumped up from the support provided by the SMA 20 curve to rise from $82.68 to $83.13. Before this, the market suffered from three straight bearish days following its repeated failure to ...

More Monero News


Bitcoin Weekly Forecast: BTC bulls brace for jump to $11,000

Bitcoin (BTC) has been growing for three weeks in a row. The first cryptocurrency hit $10,504 on Thursday - the highest level of 2020.

Read the weekly forecast