RBI to file review petition on SC's order on cryptocurrency

A day after the Supreme Court struck down the central bank's ban on cryptocurrency, the Reserve Bank of India (RBI) is mulling to file a review petition against the order.

The central bank fears that the ruling could lead to trading in virtual currencies, allow customers to link bank accounts to cryptocurrency platforms and put the banking system at risk, said an ET report quoting people aware of the matter.

In April 2018, the RBI had ordered financial institutions to break all ties with individuals or businesses dealing in virtual currencies.

According to RBI, the decision to ban crypto was taken to prevent the cryptocurrency industry from affecting payment services in India. But the latest top court's order may promote all the cryptocurrency platforms who had shifted their base to Singapore to move back to India.

Along with RBI, the government had also warned people about the risk of dealing with cryptocurrencies. The ban had led to the closure of over a dozen startups dealing with cryptocurrency in the country.

However, on Wednesday, a three-judge Supreme Court bench said that the RBI needs to show at least some semblance of any damage suffered by its regulated entities.

Citizens have the right to create a new industry of cryptocurrencies and exchanges along with the fundamental right to trade, it further added.

Meanwhile, the Internet Mobile Association of India (IAMAI) had also advised that rather than banning the virtual currencies, applying for India's consumer protection and anti-money laundering laws on them is also an option.

Going further, it would be interesting to track which stringent regulations does the government brings in now as it has become a matter of concern for regulators, startups, and stakeholders.