After Court Victory, Indian Exchanges Gear Up for Crypto Trading Surge

The decision by India's Supreme Court to lift the central bank's ban on cryptocurrency trading could soon translate into notable growth in trading volumes, according to cryptocurrency exchanges in the country.

India's Supreme Court on Wednesday quashed a Reserve Bank of India order dated April 6, 2018, which prohibited banks from providing services to entities dealing with cryptocurrencies.

Kotak Mahindra Bank, one of the largest lenders in India, has diligently sent multiple notification emails to account holders in the last two years warning against the use of credit cards for cryptocurrency exchanges.

As a result, Indians crypto traders were forced to use peer-to-peer crypto trading platforms, which allow direct transfer of cryptocurrencies into the individual accounts without the intervention of any financial institution or government authority.

"Crypto exchanges including WazirX will now be able to enable banking channels for fiat deposit and withdrawals," said Nischal Shetty, founder & CEO of Mumbai-based cryptocurrency exchange WazirX, which was recently acquired by Binance, the world's largest exchange by trading volume.

Shetty expects volumes on Indian cryptocurrency exchanges to grow by 10 times in the near future.

"The Supreme Court decision to lift the bank is a forthcoming step and cryptocurrency exchanges should now start focusing on deploying stronger know-your-client, user data privacy, and AML policies," according to Arpit Ratan, co-founder of RegTech startup Signzy.

Indian lenders serving cryptocurrency entities will now face similar which banks in other, developed countries such as Japan, Europe, and the U.S. are facing.

"There's still a bill that the Parliament has to discuss. It has changed shapes and forms but hopefully this will be the framework for how cryptocurrency is traded in the country," said Prashant Swaminathan, founder and CEO of Tandem, a peer-to-peer bitcoin trading platform told Mint, an Indian financial daily newspaper.

The Indian government had submitted a draft crypto bill named entitled "Banning of Cryptocurrency & Regulation of Official Digital Currencies" to the Supreme Court in August 2019, seeking to ban the use of cryptocurrency as legal tender or currency and prohibit mining, buying, holding, selling, dealing in, issuance, disposal or use of cryptocurrency.