RBI Clarifies Stance on Virtual Currencies, Sets Aside April 2018 Order

The Reserve Bank of India (RBI) has issued a clarification regarding its stance on virtual currencies (VCs), stating that the April 2018 order on VCs is no longer valid following a Supreme Court judgment in March 2020. The RBI's clarification comes after several banks, including State Bank of India and HDFC Bank, cautioned their customers against dealing in VCs citing the RBI's April 2018 order. The RBI's advisory had prohibited regulated entities from dealing in VCs or providing services related to them.

Key Takeaways:

• The RBI's April 2018 order on virtual currencies (VCs) is no longer valid following a Supreme Court judgment in March 2020.
• The RBI has clarified that regulated entities cannot cite its April 2018 order as it was set aside by the Supreme Court.
• Several banks, including State Bank of India and HDFC Bank, had cautioned their customers against dealing in VCs citing the RBI's April 2018 order.
• The RBI's advisory had prohibited regulated entities from dealing in VCs or providing services related to them, including maintaining accounts, registering, trading, settling, clearing, and giving loans against VCs.
• The RBI's clarification may provide relief to customers who have invested in cryptos.

Statistics:

• The RBI's April 2018 order was set aside by the Supreme Court on March 4, 2020.
• The RBI had prohibited regulated entities from dealing in VCs or providing services related to them since April 8, 2018.
• The RBI's advisory had covered various aspects of VCs, including maintaining accounts, registering, trading, settling, clearing, and giving loans against VCs.

Sources:

• Reserve Bank of India (RBI) notification dated [April 2023 not specified]
• Transfer of news report by State Bank of India and HDFC Bank cautioning customers against dealing in VCs
• Supreme Court judgment in writ petition (Civil) No.528 of 2018 (Internet and Mobile Association of India vs Reserve Bank of India)
• IE Online Media Services Pvt. Ltd. news report dated Copyright 2021