Now That SC Allows Cryptocurrency Trading, Here's All About Buying & Selling Of Bitcoin, Others

Supreme Court on Wednesday allowed banks and financial institutions from providing services related to cryptocurrencies by setting aside the RBI's 2018 circular which had prohibited them.

SC decision to lift the ban on trading in virtual currencies is very likely to change market equation. (Representative Image/ AFP)

New Delhi: Now that the Supreme Court of India has lifted the ban on trading of cryptocurrencies such as Bitcoin and others, several investors and market professionals are mulling around the aspects of the digital trade business and how to move forward. While many crypto-enthusiasts are hailing apex court's decision of quashing Reserve Bank of India's (RBI) ban, mainstream market investors seem conscious and are raising concerns over the issue. Supreme Court on Wednesday allowed banks and financial institutions from providing services related to cryptocurrencies by setting aside the RBI's 2018 circular which had prohibited them. The apex court's decision came following a plea by the Internet and Mobile Association of India (IMAI). Now that the court has allowed trading in cryptocurrencies, here is all you need to know about it: What Are Cryptocurrency? Cryptocurrency are digital or virtual currency in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds, operating independently of a central bank. Trading in this format includes cryptographical functions to conduct financial transactions between two parties through private and public keys. One of the most beneficial feature of trading in cryptocurrency is the fact that the process is not monitored or controlled by the Central authority and banks and financial institutions can operate independently. Another benefit is the minimal processing fees it incurs. Many cryptocurrencies are decentralised networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. History Of Cryptocurrencies In India? In 2013, the RBI in an advisory cautioned users, holders, and traders of virtual currencies, including Bitcoins, about the potential financial, operational, legal, customer protection, and security-related risks that they were exposing themselves to. One year after setting up a panel to study the possible outcomes of cryptocurrencies, the Reserve Bank of India, in April 2018, introduced a regulation to ban cooperation between the digital currency and financial institutions under its purview of business and cryptocurrency related businesses. On July 3, 2018 while hearing IMAI's plea, the top court had refused to stay the RBI circular prohibiting banks and financial institutions from dealing with the cryptocurrencies like bitcoin. It had also sought response from the RBI, Finance Ministry and Union ministry of Information and Technology on the plea. How Market Equation Will Change After SC's Order On Cryptocurrency Trading? Supreme Court's decision to lift the ban on trading in virtual currencies is very likely to change market equation big time as one can transact with another sitting in any corner of the world using cryptocurrencies without the need of bank accounts, cheque books and at a very nominal fees. Trading in cryptocurrencies just require peer-to-peer technology and a decent internet connection in your device. According to economic expert Pankaj Jaiswal, India is country where a large number of people, nearly around 15-20 per cent, who do not have accounts at any banks but still have needs to transfer money.

" The adoption of mobile internet, loyalty points, reward points and e-wallets have well supported the ideology of cryptocurreny as it nullifies the mandatory recognition of the state establishment. "

-Pankaj Jaiswal

One on hand where payment trough debit/credit cards have certain transaction fees, cryptocurrencies, on the other is almost free and this is the reason behind global acceptance of trading in virtual currencies. The major cryptocurrencies include Bitcoin, Ethereum and Ripple. As per reports, Bitcoin alone hit $10,000 mark against the US dollar earlier this year and has also gained three and a half times in just 35 days in late 2017 to reach nearly $20,000. However, it, later on, plunged 70 per cent in seven weeks.