Bad News For Crypto From India

India’s top court refused to overturn a ban by the Reserve Bank of India (RBI) on lenders from dealing in cryptocurrencies. This move effectively outlaws cryptocurrencies in the country, which represents the third largest economy in Asia.

The court was headed by Chief Justice Dipak Misra, who said that the ban on banks and other financial institutions providing any services related to cryptocurrencies will remain implemented, Bloomberg reported. Initially, all institutions were given three months to cease such operations, effective from April 6th.

During the court hearing, the RBI said that Bitcoin cannot be treated as currency under India’s existing law, as it dictates that coins must be made either of metal or exist in a physical form, and be stamped by the government. The finance ministry has yet to make a final ruling on a formal ban, but it is presumed that this step is not far away as the central bank is trying to “cut off an avenue for crimes using cryptocurrencies.”

This is a step behind most countries’ reactions to cryptocurrencies: nations such as South Korea are taking steps to ensure more secure crypto trading, while the island nation of Malta has already established itself as Europe’s blockchain and cryptocurrency hub.

However, other news imply that this might not hit India’s exchanges as hard as previously thought. Nischal Shetty, chief executive of WazirX, an Indian crypto exchange that is set to introduce peer-to-peer trading, told Economic Times in India, “If banking is something the exchanges are not allowed to do, then the solution is that direct banking doesn’t come in.”

According to them, the buyer and seller can deal with each other directly while WazirX acts as an escrow account that holds the cryptos during the transaction to avoid cheating, eliminating banks completely. WazirX allows only registered users, with verified KYC (know your customer) details to trade on their platform, as opposed to less regulated websites like LocalBitcoins.