Indian cryptocurrency exchanges bounce back as banking ban lifts
Beyond initial market impacts, the order stands to bring more clarity and easier growth to the blockchain industry.
Just hours after the Indian Supreme Court ruled the reserve bank's cryptocurrency banking ban unconstitutional, the CoinDCX cryptocurrency exchange became the first in the country to implement INR bank transfers.
"We thank the Supreme Court and the entire community who stood with us in this case, and for everyone who contributed to the process of reaching today’s landmark decision," said CoinDCX co-founder Neeraj Khandelwal. "Today should be a celebration of the capabilities of young entrepreneurs in this country – I believe the uplifting of this ban will unleash new possibilities for tremendous growth and never-seen-before innovation in India’s technology sector."
"Needless to say today is a historic day for not just the crypto community, but for the entire country," said CoinDCX co-founder and CEO Sumit Gupta. "We have always seen crypto as a potential to unlock India’s dream of becoming a $5 trillion economy and remain committed to carrying out the hard work which is necessary to make this dream come true."
"India’s crypto environment is going to have a transformation after the court verdict. Because of this, crypto-INR pairs are going to see a massive jump as new investors (both institutional and retail) can now invest in the crypto markets without any hesitation or skepticism," Gupta said.
Immediate results
Indian cryptocurrency exchange WazirX saw an immediate surge in trade volumes.
This volume appears to be driven by crypto-to-crypto trading though, as the WazirX INR markets seem to be very sleepy at the moment. A similar picture can be found on CoinDCX, whose INR markets are also considerably quieter than its crypto to crypto.
The news is driving trading, but so far it looks like those who were already in the market.
It looks like traders are pretty psyched, but they're more psyched about the end of the banking ban than about actually trading with INR.
However it's been less than a day, at the time of writing, since the banking ban was lifted, and the legal struggle took well over a year, so it would be a bit silly to expect results as quickly as flipping a switch.
And in the long run, the main benefits are likely to be the clarity this brings to India's cryptocurrency scene rather than how it initially impacts the markets.
As Anirudh Rastogi, founder and managing partner at Ikigai Law, the firm which initially took on the case and fought the crypto ban, explained:
"The court struck down the circular on the grounds that:
- There is no empirical evidence of any harm caused to the RBI regulated entities (including banks)
- Cryptocurrencies are not currently banned – despite several committees coming up with proposals and two draft bills, the government has not been able to decide on their legality
- The ban is not proportionate to the risk sought to be addressed by such ban."
It's important to have these facts laid out, given the confusion around cryptocurrency's status in India.
"The judgment recognises that RBI’s circular of 6 April 2018 was not the least invasive measure in order to regulate virtual currency, and that while the RBI had the power to take pre-emptive measures it had been unable to show any semblance of damage suffered," said Senior Advocate Nakul Dewan. "The judgment is a positive step towards the freedom of trade in India and also highlights the approach of Indian Courts which is positively tailored toward making India’s software industry in sync with countries like the United States, United Kingdom, Singapore, and Japan, where the trade in virtual-currency is regulated."
The end of the banking ban is the first step. Everything that happens next is the second.
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Disclosure: The author holds BNB and BTC at the time of writing.
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