Reserve Bank of India Rebuffs Crypto Ban RhetoricĀ ByJimmy AkiPRO INVESTOR Updated: 21 January 2020 DisclosureWe sometimes use affiliate links in our content, when clicking on those we might receive a commission ā at no extra cost to you. By using this website you agree to our terms and conditions and privacy policy. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Join Our Telegram channel to stay up to date on breaking news coverage The Reserve Bank of India (RBI) is pushing back against the belief that it banned cryptocurrencies from the country, after it was accused of doing so by a major tech regulator.Ā As the Economic TimesĀ reportedĀ earlier today, the RBI issued a response to the Internet and Mobile Association of India (IAMAI), a non-profit entity that exists to lobby for the interests of its members. Last year, the agency- which consists of companies such as Yahoo!, Apple, eBay, and more- wrote to the RBI in an attempt to convince what it deemed a ban on cryptocurrencies in India.Ā Banking Restrictions Werenāt an Outright Crypto BanĀ Of course, the IAMAI was referencing a circular released by the countryās highest banking institution, in which it directed commercial banks nationwide to cease from offering their services to businesses that operate in the crypto space.Ā The IAMAI took offense against this decision, and appealed the ābanā at the Supreme Court. Last month, the agency argued that cryptocurrency trading was a legitimate business. Still, the activity wouldnāt be able to thrive in India because the RBI has blocked crypto exchanges and trading platforms from getting access to bank accounts.Ā In its response, the RBI reportedly pointed out that it didnāt ban virtual currencies- it only made these banks aware of the many risks associated with the sector, thus helping to shield them from any of these risks- as it is supposed to.Ā In an affidavit, the agency reportedly expatiated, āFirstly, the RBI has not prohibited VCs (virtual currencies) in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs⦠The RBI has been able to ringfence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks.ā IAMAI Calls for Effective Crypto RegulationsĀ Both parties are currently locked in a legal battle at the Supreme Court, with court hearings and appearances starting last week. The legislation passed by the RBI has had devastating effects on the Indian crypto space, especially considering that no business will be able to operate without owning at least a bank account.Ā Several crypto-related companies in the country have either been forced to overhaul their operations or completely shut down, with all of them echoing the same sentiment on how the government is killing the sector. In last weekās hearings, Ashim Sood, the legal counsel for the IAMAI, argued on several grounds, including that while there hasnāt been any international jurisdictional conclusion that crypto canāt be regulated, the RBI seems to have made that conclusion ion its own. He added that the government has still been unable to tackle several macroeconomic issues such as capital outflows, and by restricting cryptocurrencies, its ability to handle these issues is even further hamstrung.Ā On the topic of cryptocurrencies and their risks, Sood pointed out that several countries and regions have been able to adopt regulations- including licensing requirements, capital requirements, and other measures- to regulate crypto companies and bring them under the umbrella of existing laws. Instead of just kneecapping the crypto space and all the companies that operate therein, he argued that effective and progressive regulations should be put in place.Ā Join Our Telegram channel to stay up to date on breaking news coverage