India’s Supreme Court is today hosting the final hearings of the ongoing case between cryptocurrency exchanges and the central bank concerning the latter’s blanket banking ban introduced in April.
The country’s foremost court is hearing petitions and the case against the circular issued by the Reserve Bank of India (RBI) in April 2018. In it, the central bank issued a prohibitive ban that directed banks and other regulated financial institutions to stop providing services to cryptocurrency exchanges and the wider industry within three months.
A last-minute petition to grant a temporary stay against the RBI circular was denied by the Supreme Court on July 3, days before the deadline that came into effect on July 6. The impact of the policy has largely nullified the booming domestic cryptocurrency trading industry with a number of exchanges seeing substantial declines in active users.
India’s crypto exchange operators have predictably challenged the central bank’s notice across the country’s courts, arguing the RBI’s chokehold is “arbitrary, unfair and unconstitutional”. In June, a Right to Information (RTI) request from a domestic lawyer seeking answers for the central bank’s policy went through, forcing the central bank to admit that it had conducted no research or consultation before introducing its crippling policy.
ON July 20, the Supreme Court saw ‘limited arguments’ from lawyers on behalf of the Internet and Mobile Association of India (IAMAI) – a body that domestic exchanges are part of, and the central bank.
“The policy of the RBI is of extreme caution [toward the crypto sector],” a lawyer representing the central bank argued. The advocate for the exchange industry suggested that Indian cryptocurrency adopters and the wider blockchain industry are losing ground compared to global counterparts due to the restrictive policy.
At noon today, the Supreme Court hadn’t heard the case as a result of delays but judgment day could bring some much-needed clarity– and possibly respite – for India’s nascent but growing cryptocurrency ecosystem.
CCN.com is following events at the Supreme Court, stay tuned.
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Last modified: March 4, 2021 3:39 PM