Cryptocurrency is one of the most popular assets right now across the whole financial system globally. Different countries across the world are trying out different measures and introducing new projects to increase crypto adoption. This can be seen in India also after the revocation of the banking ban by the Indian Supreme Court, which was imposed by the central bank of the country, Reserve Bank of India (RBI). The revocation of the ban divided the Indian crypto ecosystem into two different phases i.e before and after the ban.
Ever since cryptocurrencies have started becoming popular in India, it could be seen that RBI has repeatedly warned the people of its country against cryptocurrencies. Since December 2013, RBI has released several notices which urged the Indian citizens to not get involved in cryptocurrency. Not only this, but people were also warned against investing in cryptocurrency. After releasing all these warnings against cryptocurrencies, RBI had imposed a banking ban by issuing a circular which prohibited all the banks and financial institutions from involving or providing any kind of financial assistance to anything related to cryptocurrencies.
The RBI had been maintaining quite a strict stand on cryptocurrencies in India, right from the start. This is quite evident from the notices that it kept issuing to the public for warning them against cryptocurrencies. Back in 2017, RBI issued several press releases in which it stated that it does not authorize any enterprise in India to deal with cryptocurrencies. Along with this, it had cautioned every consumer for purchasing or dealing in cryptocurrency. This had caused a major impact on the Indian crypto ecosystem which was already struggling to attain some position in the global crypto ecosystem.
Different entrepreneurs dealing in cryptocurrencies and crypto exchanges had filed a petition with the Supreme Court of India against this ban by RBI. However, nothing had been done in their favor until March 2020. During that time, some of the most influential people from the Indian crypto ecosystem had raised their concerns. Sathvik Vishwanath, CEO of the Unocoin crypto exchange had said that due to this ban, the volumes had gone extremely down because of which new users were hesitant reluctant to join the crypto space. Along with this, the existing users were also in quite a difficult position as they were assuming that they were going to face huge losses due to this ban imposed by RBI.
On top of everything, the word 'ban' associated with anything gives a completely negative impact which prevents a wider adoption.
This two-year-long ban which was imposed by RBI on banks had been lifted by the Supreme Court of India on March 04, 2020. After lifting this ban, the financial institutions and the banks are allowed to provide financial assistance to the firms or enterprises dealing in cryptocurrencies. This has been a great relief for everyone who was dealing with cryptocurrency in the Indian crypto ecosystem. People from the crypto space have accepted this judgment by the Supreme Court as a historic one.
As soon as the ban was lifted by the Supreme Court, the Indian crypto exchanges had resumed the support for INR through bank accounts. After this ban was imposed, Indian crypto users were continuing crypto trading through peer-to-peer trading. Now after resuming the INR support, it has become quite convenient for the Indian crypto users. Along with this, people are showing great interest in the crypto space and are willing to invest their funds in it. This is also giving huge encouragement to the crypto startups in the country and they seem to gain ground in the country after the revocation of the ban.
This ban was lifted amid the COVID-19 pandemic and despite the slowdown, the Indian crypto ecosystem was seeing a great response. The exchanges have seen all-time highs in their daily volumes even during the pandemic and huge volatility in the market.
Imposing a ban on virtual currencies should not be encouraged by any government, rather they should consider regulating them. It is highly important for any economy out there in the world to keep up with the trend. Currently, most of the countries across the world are moving towards a wider crypto adoption. There is a high need to move towards the same in India also in order to sustain in the current global financial world. The Supreme Court of India has initiated its part for the wider crypto adoption in India by lifting this banking ban and now it is the responsibility of the government to further encourage it.