Virtual currencies like Bitcoin and other cryptocurrencies are not ban in India and Indians still can invest in cryptocurrencies
Indian central bank Reserve Bank of India (RBI) said, it has not prohibited VCs (Virtual Currencies) in the country in response to the petition filed by the Internet and Mobile Association of India (IAMAI) in the Supreme Court of India against the circular issued by RBI directing the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs, according to the recent report published by The Economic Times.
RBI had filed a 30-page affidavit in the Supreme Court of India on September 4, 2019. The affidavit said :
"Firstly, the RBI has not prohibited VCs (Virtual Currencies) in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs... The RBI has been able to ringfence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks,"
The crypto case began on January 14 this year and the hearing is on in the Supreme Court. From 14 January to 16 January, the Supreme Court held a three-day consecutive crypto case hearing on the RBI banking ban and the hearing is expected to continue this week as well.
According to legal expert Salman Waris, managing partner at Delhi-based TechLegis Advocates & Solicitors in reply to ETtech,
"To advocate or justify a ban on cryptocurrency solely on the basis of fear of use of the same by terrorist organisations may not be a very practical and strong position for the RBI,"
"As on date there have been no reported instances of India-focused terrorist groups using cryptocurrencies, while there are well-documented cases where law enforcement agencies having the level of expertise and sophistication sufficient to discover new vulnerabilities in crypto systems have launched technical attacks to thwart the surreptitious use of cryptocurrency by terrorist organisations," he said.
Many people are still confused as to whether cryptocurrency is banned in India. The RBI's reply to the Supreme Court will clear up confusion that cryptocurrency is not banned in India and Indians can still buy and sell it.
Many people are using peer to peer (P2P) crypto exchanges like CoinDCX, Bitbns, Paxful, Localbitcoin, WazirX etc. in India to buy and sell cryptocurrencies. P2P service facilitates over-the-counter trading of local currency for bitcoins and other cryptocurrencies. Users post advertisements on the website, where they state exchange rates and payment methods for buying or selling bitcoins. P2P trading volume has increased manifold in the last two years due to RBI banking restrictions to trade cryptocurrencies in India.