]In a new twist, the Reserve Bank of India has admitted to issuing its ban on cryptocurrency related accounts spontaneously, without taking time to research and understand how cryptocurrencies work. In response to an interrogation of the right to information request filed with a local attorney With the Twitter manage Blockchainlaw91, the bank disclosed that its decision to prohibit cryptocurrency related accounts within the country was made without due consultation or study. The Way It StartedIndia’s main Bank, the Reserve Bank of India, began warning its citizens against the risks of investing in cryptocurrencies in 2013, that was followed closely by 2 other warnings in 2017, before coming down hard on the industry earlier this year.
On Apr 5, 2018, RBI published a statement, saying that it was banning the nation’s banks to deal with any business or entities dealing with or settling. RBI Deputy Governor B.P. Kanungo who spoke to the reporters said that there was a 3 month grace period for companies providing such solutions to wind down operations. The bank said the move was motivated by the requirement to defend Indian clients and prevent money laundering. In 2017, prior to the ban, the Indian government had formed a committee, which comprised the RBI, with the purpose of analyzing virtual currency and how they work.
The committee had proposed banning cryptocurrency exchanges within the country, but the high price of bitcoin towards the close of the year led to a rapid reversal of the position along with the creation of a brand new panel to examine cryptocurrencies. Surprisingly, in its response to Blockchainlaw91’s query, the Reserve Bank of India revealed that its choice to prohibit the bank’s actions with crypto based businesses wasn’t backed up by any individual research or research. Petitions and Migration – The Internet and the Mobile Association of India; that comprises Indian crypto exchange Zebpay, have filed a writ petition to overturn RBI’s ban that prohibits banks from dealing with crypto based businesses.
The case is presently in the Supreme Court with a hearing date fixed for July 20. Considering that the ban on crypto, there have been claims that blockchain companies might be forced overseas. Joel John, a research analyst in a U.K.-based blockchain firm who spoke with local media, believes cryptographic companies may easily migrate to friendlier nations to set up new things. He said: Companies moving overseas isn’t a brand new fad, but the regulatory complexity faced by blockchain companies have accelerated it. It’s progressively becoming a pattern for authorities to make spontaneous decisions on cryptocurrency without initially seeking to know how it works. Russia and Japan have every tried to ban crypto companies before finally softening their stances.