After about one-and-a-half months of delay, the Supreme Court of India has brought up the case against the cryptocurrency banking ban by the Reserve Bank of India (RBI). The apex court had asked the government of India to present its report on cryptocurrency based on the findings of the special committee which was formed to evaluate the crypto sphere. The Supreme Court has given the government two weeks’ time to submit the report.
As part of the original plan, the Supreme Court was to hear petitions against the RBI’s ban on cryptocurrencies on September 11. After repeated delays, the court finally brought up the case on October 25.
Nischal Shetty, CEO of Indian crypto exchange Wazirx said, “Supreme court has asked the government to file an affidavit related to the findings of the crypto committee set up by them. They’re supposed to submit this within two weeks. We don’t know what the committee report contains as of now.”
“So regardless, what we can expect is much more clarity about crypto from a government point of view. That’s a good step forward,” Shetty added.
Earlier, on April 6, the RBI had issued the circular on ‘Prohibition on Dealing in Virtual Currencies (VCs).’ Prior to the April 6 circular, the RBI had sent public notices on 24 December 2013, 01 February 2017 and 05 December 2017 cautioning users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies.
As per the RBI circular, “entities regulated by the Reserve Bank shall not deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs. Such services include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/sale of VCs.”
The circular also added, “Regulated entities which already provide such services shall exit the relationship within three months from the date of this circular.”
Soon after the circular was issued, commercial banks closed the accounts of crypto exchanges. While some industry participants filed petitions against the ban, which went into effect in July.
Many of the local exchanges came up with their own solutions to bypass the banking ban. On September 28, Zebpay halted its exchange activities in India due to the banking problem and proceeded to set up operations in Malta. Similarly, the International Digital Asset Platform (IDAP) also shifted its base to Estonia.
It will be interesting to see what the government committee on cryptocurrency presents in its report which is due to be submitted within two weeks. The crypto community will be keeping a close watch on the subsequent proceedings of the supreme court on this.