NEW DELHI: The Supreme Court (SC) endorsing their stand against curbs put in place by the Reserve Bank of India (RBI), that effectively outlawed virtual currencies in India, on Wednesday only confirms that cryptocurrencies can no longer be dismissed as just a fad.
With a market capitalisation of nearly $300 billion, cryptocurrency, in fact, is touted as the future of digital finance.
According to experts, the ruling is an opportunity for businesses in India to push against stricter rules that may be coming their way from the unconvinced government, even as optimists see the move potentially raising hope for the likes of Facebook Inc’s Libra cryptocurrency.
“The verdict tells us that reluctance to regulate something cannot be the reason enough to stifle or kill a full industry, and for that matter, even a single entity. The innovative industry now gets an equal opportunity to exist and grow as the apex court outright shot down a strong policy step by RBI and gave a thumbs-up to the crypto exchanges and crypto as an asset class,” explained Manish Kumar, co-founder of GREX, a start-up that operates an online stock exchange-like facility for unlisted start-ups. In 2018, the central bank had placed a ban on banks and financial institutions from dealing with virtual currencies like bitcoins and others.
As an effect, domestic exchanges allowed buying and selling of cryptocurrencies but transactions had to be routed through an intermediary, typically referred to as a P2P payment application.
The Supreme Court ruling, however, opens up the gateway for exchanges to get back to dealing with banking channels and revive their business of facilitating exchange of virtual currency.
“It will also give birth to a lot of start-ups in India and gives an opportunity to players like us to innovate in the country and democratise blockchain technology for users across the globe,” said Zac Cheah, CEO, Pundi X.
With a population of over a billion, the Indian market is a sleeping giant, believes Nischal Shetty, founder & CEO,WazirX, which processes around $20-25 million worth of transactions a month, with 2.5 lakh users, the majority of whom are Indians.
“This judgement is positive as it will open doors to massive crypto adoption in India. We can also see venture capitalists investing into the maturing space and companies are likely to now start focusing on deploying stronger KYC, user data privacy, and anti-money laundering policies to reduce room for cryptocurrency transactions to be exploited for illegal activities and tax evasions,” Shetty noted.
WazirX Tokens rose by 25 per cent in value post the judgement.
- While the crypto ecosystem is overjoyed by the relief from the highest court of the country, there is a decision pending with Parliament on the matter of banning of virtual currencies
- Draft Banning of Crypto Currency and Regulation of Official Digital Currency Bill, 2019 seeks to prohibit mining, holding, selling, trade, issuance, disposal or use of cryptocurrency