View: India needs legal framework for cryptocurrencies

By Nehaa Chaudhuri & Anirudh Rastogi


On March 4, the Supreme Court overturned the Reserve Bank of India’s (RBI) de facto ban on cryptocurrencies. In an April 2018 circular, RBI had banned crypto traders and exchanges from accessing formal banking channels.

The apex court found RBI’s actions ‘disproportionate’ to the risks it sought to address and, therefore, unconstitutional. How did we get here? In part because of an inadequate — and even secretive — consultation process.

An RTI application filed a few days after RBI’s ban revealed that the central bank undertook no research or consultation before acting. Later, when the Supreme Court asked it to consider representations by crypto exchanges, RBI filed a response so general, that the court had to order a detailed point-wise reply within two weeks.

Meanwhile, GoI also didn’t publicise its consultation on regulating virtual currencies initiated on MyGov.in, meant to aid a government committee’s deliberations….