On 4th March 2020, the Supreme Court of India lifted RBI’s ban on cryptocurrency trading. Two years back, the Reserve Bank of India (RBI) restricted banks from providing services to cryptocurrency exchanges and other organizations dealing with the same. However, the decision of the Supreme Court to legalize digital assets in India rescinded this order of RBI.
The court called this ban unconstitutional which brought happiness in the whole crypto market. Ashish Singhal, Chief Executive of CoinSwitch.co said that this is just the first step towards supporting digital currencies in India. He also added that India has the potential of listing itself among one of the largest cryptocurrency markets.
Experts’ Views on Ban
According to the experts and crypto exchanges, lifting the ban put by the Central Bank can soon result in remarkable growth in its trading volumes. Indian traders and investors can now directly trade in Indian Rupee (INR). They can deposit INR from bank accounts to digital currency exchanges. This will ease up the process and will make it convenient for traders to cash in and cash out of their holdings.
Founder and CEO of Cashaa, an online crypto banking platform, Kumar Gaurav said that huge damage was done to India’s trading system, firstly due to the lack of awareness and above that the decision of RBI. According to Ashish Singhal, India was performing excellent in terms of trading volumes before the RBI ban. Approximately, $50 to $60 million was contributed every day.
After the order for banking restrictions was issued by the Central Bank, volumes eventually sank. Banks advised account holders to not get engaged in any cryptocurrency transactions. For example, in the last two years, Kotak Mahindra Bank sent various email notifications to its customers to warn against the use of credit cards for digital currency exchanges.
As a result of this, Indian crypto traders were compelled to use peer-to-peer crypto trading platforms. These platforms allowed direct transfer of digital currencies to traders’ accounts without the interference of any banking institution or government authority.
However, with the latest ruling of the Supreme Court of India, this situation is expected to change for betterment. Founder and CEO of WazirX, Nischal Shetty said, “Crypto exchanges including WazirX will now be able to allow banking channels for fiat deposit and withdrawals.” According to him, in the near future, trading volumes on Indian crypto exchanges will grow by 10 times.
Ashish Singhal of CoinSwitch expects that average daily volume will rise above the level that was before the ban i.e. $50 to $60 million. Sumit Gupta, Chief Executive of CoinDCX said that the judgement has brought clarity related to digital assets. This will help in the adoption of crypto and in turn will increase the volume.
Focus on Adoption
Arpit Ratan, the co-founder of Signzy, states that the decision of lifting the ban is a helpful step and digital currency exchanges should start focusing on using KYC, user privacy data, and AML policies. This will help in building trust and reduce the risks of illegal activities, money laundering, etc during cryptocurrency transactions.
Kumar Gaurav, Founder and CEO of Cashaa, said that Cashaa can provide a powerful system which will prove to be helpful for RBI in understanding issues such as anti money laundering etc, that can arise due to more crypto companies entering the market.
After the Supreme Court’s ruling, professionals are expecting that a path of regulations will open up to protect all stakeholders which includes companies, customers and users as well. All the information related to regulations and legalities for operating digital currency business is still not discussed. However, experts are predicting that a beneficial regulation for mining, buying, holding, selling, issuance, disposal or use of cryptos will be provided.
Hence, it can be concluded that for sure volume growth in crypto trading can be expected. This judgment has been favorable for the whole crypto sphere. It has helped in removing the misconception that cryptos are illegal and are fraud schemes. This will result in drawing more and investors to the market.