The Reserve Bank of India headquarters in Mumbai. Photo: AFP
The Reserve Bank of India headquarters in Mumbai. Photo: AFP

After a stressful Supreme Court hearing, India has conceded that bitcoin and crypto assets are not illegal. The Reserve Bank of India (RBI), the country’s central bank, also stated it did not place restrictions on bitcoin (BTC) or other virtual currencies, the Economic Times of India reported.

The Reserve Bank of India said it merely put in place ring-fence regulations, to protect banks and institutions from the risks related to trading bitcoin and other crypto assets. The central bank has also restricted banks from dealing in bitcoin and crypto, due to concerns over terrorism financing. The wider public is not restricted from trading, or using digital assets in a peer-to-peer fashion, Bitcoinist reported.

The central bank, however, has expressed concerns about the effects of digital assets, without going for an outright ban. This prompted the Internet and Mobile Association of India (IAMAI) to protest before the Supreme Court, based on an RBI circular distributed in 2018.

The bank explained that it did not ban all entities, but only certain companies that should not be involved with bitcoin and other digital currencies. In an affidavit, the RBI explained: “Firstly, the RBI has not prohibited VCs [virtual currencies] in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs.

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“The RBI has been able to ringfence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks.”

Meanwhile, Indian Telecoms and IT Minister Ravi Shankar Prasad has tasked the National Informatics Centre (NIC) with developing a blockchain-based solution for improving the quality of government schools, Cointelegraph reported.

According to a January 20 report by the Press Trust of India, the minister made the request at the inauguration of a blockchain technology center of excellence, set up by NIC in Bengaluru, on January 18.

The NIC and local state authorities should open their doors for startups working under defined norms, said Prasad, adding: “I am very keen how we can leverage blockchain in primary education. In fact today I am going to give you a task, NIC team. Can you think of a good application of blockchain technology for improving the quality of government schools all over the country?”

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