Industry reacts to India's u-turn on crypto

India’s Supreme Court has overturned the Reserve Bank of India’s ban on cryptocurrency trading in a 180-page ruling.

The Supreme Court’s decision once again allows crypto exchanges to operate in the country with stable banking services, enabling the general population to invest in the asset class.

Executives from the crypto industry were unsurprisingly optimistic about the ruling, which opens up a major market for cryptocurrencies for the first time in nearly two years.

Sumit Gupta, co-founder and CEO of crypto trading platform CoinDCX, which filed one of five petitions to the Supreme Court, called the ruling “a historic day for not just the crypto community, but for the entire country.” He added that the lifting of the ban would “open new opportunities for India in terms of investments, economic growth, financial inclusion, and market maturation.”

Former Coinbase chief technical officer Balaji Srinivasan described the ruling as “amazing,” noting that “India is back in the game."

Nischal Shetty, founder and CEO of  Indian crypto exhcange WazirX—which was acquired by Binance in November 2019—said that it marks an historic day for the cryptocurrency industry in India, adding that “We can now innovate.”

Jamie Burke, founder of crypto venture capital firm Outlier Ventures, noted that the Supreme Court decision is likely to benefit the decentralized finance (DeFi) market, calling it “huge for crypto.”

Jason Lau, COO of crypto exchange OKCoin, said that the Indian population no longer needs to deal with “artificial obstacles” in order to access crypto.

Changpeng Zhao, CEO of Binance—the world’s biggest crypto exchange by volume—said that he expects “more investments to go [to India] now”.

Why did the Reserve Bank of India ban crypto?

On April 5, 2018, the RBI barred banks from dealing with any crypto-related company, stating that any entities regulated by it could not deal with or provide services to “any individual or business entities dealing with or settling virtual currencies (VCs).” 

The lack of banking services made it virtually impossible for local crypto exchanges to process deposits and withdrawals. In September 2018, Zebpay, India’s biggest crypto exchange, was forced to close down its activities in India. It noted at the time that, “The curb on bank accounts has crippled our, and our customers’, ability to transact business meaningfully.”

Over the past two years, top crypto Indian crypto companies including WazirX, Unocoin and Pocketbits lobbied against the RBI’s decision, alongside the Internet and Mobile Association of India (IAMAI), fighting it out in the Supreme Court.