Banned cryptocurrency to uphold integrity of banking system: RBI

NEW DELHI: The Reserve Bank of India on Wednesday defended in the Supreme Court its 2018 circular directing banks to desist from dealing in any transactions involving cryptocurrencies, insisting that it had always been consistent in its opposition to allowing any other payments systems and undermining the integrity of the banking system.

The central bank, through senior advocate Shyam Divan, argued that though there was no formal ban on cryptocurrencies under any law in existence in India, it had consistently been warning all those dealing with virtual currencies of the risks inherent in them.

The RBI circular of 2018, he said, was part of a conscious policy decision of the regulator to ensure that the banking system was not compromised by any other payment system involving cryptocurrencies, including bitcoins which showed extreme “volatility”.

He was arguing before a threejudge bench led by Justice RF Nariman, which is hearing petitions filed by currency exchanges dealing with…