India’s Supreme Court has declined to issue a temporary injunction against the Reserve Bank of India’s blanket ban on cryptocurrency.
The RBI had issued a ban, stopping banks and other financial institutions from facilitating cryptocurrency trades in the country. In response to the ban, a coalition of petitioners, made up of four crypto exchange platforms and other startups, have challenged the RBI’s directive in court.
Interim injunctions are preliminary injunctions compelling a party to the case to refrain from or to carry out specific acts. In this case, the injunction was to stop the RBI’s directive pending a court decision on the case. With the rejection by the Supreme Court, the RBI directive will remain in place.
The Supreme Court decision is not the end as the case still needs to be heard on May 17th.
Last April, the RBI, India’s central bank, banned banks from dealing in cryptocurrency transactions. The RBI maintains that the decision was in the interest of investors, citing the fact that cryptocurrencies were a haven for fraud.
Multiple parties responded to the ban, expressing disagreement with the RBI’s position. Some took the position that the ban would jeopardize the growth and development of the country’s cryptocurrency market while others point out the vague language of the ban, contesting its constitutionality.
In a related development, the RBI has responded to the court summons, issuing a statement about the case. The RBI claims that cryptocurrencies like Bitcoin do not qualify as currency according to Indian law. The bank also stated that the Supreme Court has no jurisdiction over economic policy issues.
Prior to the ban, the RBI had already cautioned the public against crypto investments. The Indian government has also shown itself to be hostile to cryptocurrencies. Despite this hostility, there are reports that the RBI plans to create a national cryptocurrency for India.