The country’s apex court is all set to hear today the responses to the petitions challenging the central bank’s ban on crypto exchanges.
Make or Break Day for Crypto in India
Today, November 27th, 2018, is a day that may decide the fate or at least the direction for cryptocurrencies in the world’s fastest growing and the 6th largest economy.
The country’s Supreme Court will hear today responses to the petitions filed by the centralized cryptocurrency exchanges against the April order by the Reserve Bank of India (RBI), the country’s central bank.
The Controversial RBI Notification
As Bitcoin and other cryptocurrencies came into prominence last year and mainstream media went abuzz with the phenomenal growth of digital currencies, investors in India too flocked to the country’s leading crypto exchanges like Zebpay and Unocoin to get their share of the pie.
New exchanges like Koinex were launched and started doing good business. Trade volumes on all exchanges were on the rise.
The country’s finance minister, during his budget speech in February, dampened the burgeoning crypto spirit by stating that the government was keen to leverage the blockchain technology but did not recognize cryptocurrencies as legal tender.
While this caused temporary FUD, the exchanges were quick to clarify that the minister did not say that digital assets were illegal. Investors could still hold and trade cryptocurrencies like other commodities.
Then in April, the RBI issued a circular out of the blue asking the banks to sever ties with the cryptocurrency exchanges. Banks were given a buffer time of 3 months to wind up their relationship with exchanges, and July 5th was set as the deadline.
Panic followed because investors could no longer make fiat deposits and withdrawals. The trade volumes on exchanges dropped by 90%.
The Ensuing Legal Battle
Some exchanges tried to mitigate the impact by offering crypto-to-crypto trading or becoming peer-to-peer platforms while some went to court. The Supreme Court clubbed all crypto-related petitions together and set the hearing date for September 11th.
However, due to the massive backlog of cases, the hearing kept getting postponed and finally came up on October 25th where the bench of judges asked the government of India to file a counter affidavit within two weeks with details of its stand on digital assets.
Zebpay lost patience and wound up its operations in India and moved to Malta. Unocoin came up with a plan to install crypto ATMs in major cities. However, within a week of the first ATM being installed in Bengaluru, the two founders of Unocoin were arrested and later released on bail.
The government filed its counter affidavit on November 19th which included the recommendation of the panel that was set up in November last year to work on the proposed framework.
The next hearing, which was scheduled for yesterday, got rescheduled to today. It is expected that the bench will hear responses from other stakeholders like ministries of finance, law, justice, and information technology (IT) today.
Whether the court will arrive at a judgment today will not be known after the hearing is over. However, it is certain the matter is gradually inching towards closure. Overall, today may be a “judgment day” for the future of digital assets in India.
What do you think will be the outcome of the hearing today? Let us know in the comments below.
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