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.

Cryptos feed

Latest Crypto News & Analysis

Editors’ Picks

Bitcoin attempts a dead cat bounce amid a descending channel

Bitcoin (BTC/USD), the most dominantly traded cryptocurrency, is seen attempting minor recoveries on the 9900 handle, having extended the recent declines to 9,850.65, in the wake of a symmetrical triangle breakdown on the hourly sticks seen on Saturday.

More Bitcoin News

Top 3 Coins' Price Prediction: Bearish bias intact despite tepid recovery attempts

The world’s no. 1 digital coin, Bitcoin, is seen driving the broader market. However, the third most traded cryptocurrency, Ripple, fails to benefit, as it continues to lose nearly 4% so far this Sunday. 

More Cryptocurrencies News

Bitcoin Cash: Choppy inside falling wedge, with limited upside

Bitcoin Cash (BCH/USD) breached Thursday’s low of 302.41 but managed to hold the 302 handle before staging a comeback.  Despite the latest recovery attempt, the price is down 3% in the last 24 hours.

More Bitcoin Cash News

IOTA technical analysis: Sell the bounce, as bears still eye 0.2550/25

IOTA (IOT/USD), the 17th largest cryptocurrency, risks further downside in the near-term amid bearish technical setups on different time frames. 

More IOTA News


Bitcoin weekly forecast: Let the altcoin season begin

All major altcoins demonstrated strong growth while Bitcoin reluctantly oscillated in a tight range and stayed vulnerable to bearish sentiments. The first digital currency spends the best part of the week hovering around $10,200 level.

Read the weekly forecast