In a crucial ruling on Wednesday, the Supreme Court of India ruled to lift the banking ban against cryptocurrency services and companies, deeming it unconstitutional.
The Reserve Bank of India, the country’s central bank, enforced a ban against crypto-related transactions since issuing a circular on April 6, 2018, prohibiting commercial banks from providing banking services to cryptocurrency exchanges and other financial institutions that interface with digital assets.
Just six hours after the Supreme Court issued its verdict, cryptocurrency exchange CoinDCX became the first platform to integrate with a local bank. The Mumbai-based exchange announced that it now has support for fiat transfers, allowing customers to purchase Bitcoin and other cryptocurrencies using Indian rupee by linking their bank accounts.
Now that crypto businesses have access to formal banking services, industry insiders expect innovators, developers and entrepreneurs in the space to make up for lost time by building out extensive fintech and crypto economies.
According to Benson Samuel, director of technology at Tokenyz Ventures, several companies will restart their initiatives and continue building out platforms, products and services for cryptocurrencies.
“It’s a very positive sign that has come through, something that we have been waiting for and expecting for two years now. Most of the infrastructure and bits and pieces towards the cryptocurrency was already built out over the last few years.”
Says Sumit Gupta, co-founder and CEO of CoinDCX,
“India’s crypto environment is going to have a transformation after the court verdict. Because of this, crypto-INR pairs are going to see a massive jump as new investors (both institutional and retail) can now invest in the crypto markets without any hesitation or skepticism.
The market is open for everyone in India now and CoinDCX wants to provide these new investors and users with the best solution—banking integration was our first priority. Banking integration will open up large markets for us. The integration of banking channels makes the whole process of crypto adoption simpler.”
Ikigai Law represented exchanges Koinex, CoinDCX, Throughbit and CoinDelta, filing the first petition before the Supreme Court to help its clients regain access to the formal economy. The law firm argued that the exchanges had implemented full KYC and AML mechanisms to address concerns about digital assets facilitating illegal activities.
Two levels of checks on each transaction are triggered: first, whenever a customer moves money by completing a debit or withdrawal from a KYC-compliant bank and second, whenever exchanges themselves carry out KYC verification of traders.
According to Ikigai Law,
“The circular [issued by the RBI in April of 2018] unravels this safety net, to a large extent, by cutting-off banks from the ecosystem.”
The Indian crypto markets are ticking up swiftly with Bitcoin banking app Cashaa crossing 500 BTC ($4.4 million) in volume in India after the Supreme Court decision.
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