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SC frees trade in Cryptocurrencies
Why is it in the news?
- The Supreme Court set aside an April 6, 2018, circular of the Reserve Bank of India (RBI) that prohibited banks and entities regulated by it from providing services in relation to virtual currencies (VCs).
More in the news
- From the Supreme Court:
(1) Till date, RBI has not come out with a stand that any of the entities regulated by it namely, nationalised banks/scheduled commercial banks/cooperative banks/NBFCs, have suffered any loss or adverse effect diing, rectly or indirectly, on account of VC exchanges.
(2) The bench found the RBI circular “disproportionate” with an otherwise consistent stand taken by the central bank that VCs were not prohibited in the country.
- Centre's failure:
(1) Court referred to the Centre’s failure to introduce an official digital rupee despite two draft Bills and several committees.
(2) The court expanded on how the Centre had been toying with plans for an official digital currency.
- Committee on VCs:
(1) On November 2, 2017, the Centre constituted an InterMinisterial Committee, which initially recommended the ‘Crypto-token Regulation Bill of 2018’.
(2) This Bill found a complete ban on VCs an “extreme tool” and suggested regulatory measures.
(3) At that point, the committee was even fine with the idea of allowing the sale and purchase of digital crypto assets at recognised exchanges.
- What is Virtual Currency (VC)?
(1) VCs are digital currencies in which encryption techniques are used to regulate the generation of the currency units and verify the transfer of funds, operating independently of a central bank.
Source
The Hindu.