India’s supreme court has delivered a blow to the country’s cryptocurrency market after refusing to issue any interim relief to exchanges against the Reserve Bank of India’s (RBI) crackdown on them.
Supreme Court Upholds Ban
On April 6th, the RBI issued a circular to banks. This ordered them to cease any relationships with cryptocurrency exchanges and traders. At the time, they were given a three-month time frame to achieve this by. The RBI noted:
It has been decided that, with immediate effect, entities regulated by the Reserve Bank shall not deal in VCs [virtual currencies] or provide services for facilitating any person or entity in dealing with or settling VCs.
From July 6th, that ban will take effect. In April, several cryptocurrency exchanges took the RBI to the supreme court. A hearing was expected to take place on July 20th. However, the Internet and Mobile Association of India (IAMAI), which represents Bitcoin exchanges, filed a petition against the RBI, asking for an earlier hearing.
That hearing took place today, reports Quartz. Notably, though, the New Delhi Supreme Court upheld the ban against cryptocurrency exchanges. Such a decision sets the market back in India.
Rashmi Deshpande is an associate partner at Khaitan & Co. This is a law firm representing Kali Digital Eco-Systems, an Indian exchange planning to begin operations later this year. According to Deshpande:
This a win for the RBI and a big blow to virtual currency exchanges and traders. In our earlier request to the RBI as well, we had asked it to extend the deadline by a month after the July 20 hearing.
Deshpande added:
Now that the ban will continue, the banking route for the exchanges and its users will be completely choked.
India Remains Hopeful
Despite this slight setback, crypto exchanges remain optimistic.
Prime Minister Narendra Modi’s government is reportedly in the final stages of drafting regulations on the market. Subhash Chandra Garg is a secretary in the department of economic affairs. Garg is also heading a committee on cryptocurrency regulation.
According to Garg, regulation should be “discussed by the first week of July.” Additionally, it should be wrapped up “within in the first fortnight of July.”
For now, though, eyes are focusing to the July 20th hearing. It remains to be seen how this will impact market prices, depending upon the outcome. However, it’s far from an ideal situation for India’s crypto exchanges and traders.
What do you think the result will be on the 20th of July? Let us know in the comments below.
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