Reserve Bank of India Says There Is No Ban on Virtual Currencies

The Reserve Bank of India says it had not banned the use of virtual currencies in the country when it issued a circular in 2018, the Economic Times reports.

The argument came in an affidavit filed in response to a petition from the Internet and Mobile Association of India (IAMAI), which wants India’s central bank to reconsider the 2018 circular that the group claims directed regulated entities to not deal in cryptocurrencies.

According to a 30-page affidavit filed by the RBI filed and reviewed by the Economic Times,

“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.”

Crypto exchanges have been fighting to strike the RBI’s move to cut off their banking services, which effectively forced companies that trade in digital assets to shut down or relocate out of the country.

The parties will head back to court on Tuesday.

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