The Piper Alderman Blockchain Group brings you the latest legal, regulatory and project updates in Blockchain and Digital Law.
The Supreme Court of India has struck down a 2018 circular issued Reserve Bank of India preventing regulated entities from dealing with blockchain businesses, Lloyds of London launches a new insurance policy designed to protect digital currency held in hot wallets, the New South Wales District Court recently made an interim order approving the use of a digital currency exchange account as security for costs, the Bank of International Settlements releases a series of reports on CBDCs, and the coronavirus outbreak has slowed down the pace of development of China’s proposed CBDC.
Supreme Court of India quashes crypto banking ban
In a landmark decision, the Supreme Court of India has struck down a circular issued by the Reserve Bank of India (RBI) on5 April 2018, which instructed regulated entities not to deal with or provide services to any individual or business entities dealing with or settling digital currencies, in particular cryptocurrencies.
Without outright banning the use of digital currency, this effectively prevented any business which dealt in digital currencies from operating in India. In the 180-page(!) judgment, the Supreme Court ordered that the April 2018 circular be set aside “on the ground of proportionality”, saying “When the consistent stand of RBI is that they have not banned VCs [virtual currencies] … it is not possible for us to hold that the impugned measure is proportionate.”
This represents an interesting shift in approach with Courts moving increasingly to recognise the validity of digital assets as property in the UK and Australia, and perhaps India may soon follow suit.
Lloyds of London launches digital currency insurance
UK-based insurance giant Lloyds of London has announced the launch of a new insurance policy designed to protect digital currency held in hot wallets. The new policy is a liability insurance policy, and will have dynamic limits that increase or decrease in line with the price movements in digital currencies.
The new policy was created by Lloyd’s syndicate Atrium in conjunction with Coincover, and is backed by a panel of other Lloyd’s insurers, which includes TMK and Markel, all of whom are members of Lloyd’s Product Innovation Facility.
The dynamic limit of the policy, which starts from as little as £1,000, means that the policy holder can be indemnified for the underlying value of their digital currency even if the value fluctuates over the policy period.