The Supreme Court of India on Wednesday dismissed the two-year-old circular of the Reserve Bank of India (RBI). The Supreme Court has now allowed trading in cryptocurrencies. On 6 April 2018, the RBI had banned cryptocurrency transactions. It had instructed all banks and financial institutions not to deal in cryptocurrency and provide no platform for its transactions. The Internet and Mobile Association of India (IAMAI) challenged the RBI circular in the Supreme Court on behalf of cryptocurrency exchanges. IAMAI argued that there is no law in the country under which a ban on cryptocurrency is applied. In such a situation, RBI cannot ban the use of banking channels for cryptocurrency-related transactions. RBI said that it had been telling people about the dangers of cryptocurrency since 2013. This should be stopped in the beginning so that there is no risk to the payment system of the country. The Reserve Bank had also said that it has the authority to ban cryptocurrencies.
What is cryptocurrency?
Cryptocurrency is a digital currency. It can be transacted worldwide through online medium. Encryption technology is used to regulate it. It is not issued by any central bank, lending institution or any e-paisa institution. In this sense, virtual currency is a kind of uncontrolled digital money. Only those who make it an issue and control it. As of February 2018, there were 5 million traders and 24 exchanges active in the cryptocurrency business in India. Many of the world’s regulatory bodies have warned against trading in major cryptocurrency bitcoins, while some countries support it. In 2017, Japan gave Bitcoin legal currency status.
What was the status of trading cryptocurrencies in India Previously?
An Inter-Ministerial Committee on Cryptocurrency submitted the report to the Ministry of Finance last year. The committee had recommended the government to bring Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019. The committee in its report had also recommended the launch of digital currency. The committee had said that Indian consumers have to be protected from cryptocurrencies or bitcoins, as many consumers have been cheated by this. The report also recommended that every action related to cryptocurrency be called a crime. If you are found to be involved in any activity related to selling or possessing cryptocurrencies, you should be imprisoned for one to ten years. Also, a fine of lakhs of rupees should also be imposed.
What is Bitcoin?
Bitcoin is the most run and valued cryptocurrency in the world. This year it has gained 50%. The attractive feature of cryptocurrency is that it is a digital currency that you can use in any country. Its value is equal in all countries because no country’s government has control over it. Cryptocurrency is not the currency of any country, so it does not affect the economic situation of any country.
Bitcoin, being a digital currency and the government of any country having no control over it is its deficiencies. Therefore, sharp fluctuations in its value can result in a lot of profit or loss for investors. It can also be misused. Cryptocurrency can be used to buy weapons or drugs.