Nine issues were flagged before the Hon’ble Supreme Court in the case of challenging the Reserve Bank of India ban on dealings of Virtual Currencies business in India. The Apex Court answered eight in favour of RBI; However the Apex court quashed the ban on one single ground.
I. POWER OF RBI:- The Petitioners argued that VC’s are not money/legal tender thus it’s goods/ commodities thus falling outside the purview of RBI Act 1934, the Banking and Regulation Act 1949 and Payment and Settlements Systems Act 2007. The Court held RBI Act 1934, the Banking and Regulation Act 1949 and Payment and Settlements Systems Act 2007 cumulatively confers wide power on RBI to regulate matters which can affect the payment systems in country. As regards the identity of cryptocurrency it is ruled out that VC’s are not recognized as legal tender, they are capable of performing some or most of function of real currency.