India’s highest court of law in a ruling today, declined to give any temporal deferment against the central bank’s ban on banking services to cryptocurrency exchanges.
The Reserve Bank of India (RBI), the country’s central bank on April 5 released a circular to all regulated financial institutions including banks to stop them from offering services to businesses in the cryptocurrency industry. The impending policy also required banks to ban their own retail clients form buying cryptocurrencies through their banking accounts. With a three-month deadline, the ban is to be implemented on Thursday, July 5.
The decision undoubtedly created concern across the emerging but fast-developing domestic crypto sector. A number of exchanges filed a request in courts across the country to challenge the central bank, debating the policy was “arbitrary, unfair and unconstitutional.” Such was the reaction from the industry that the Supreme Court considered to remove all pending rumors while stopping high courts from receiving any further requests against the RBI controls.
In mid-June, a petition by the Internet and Mobile Association of India fast-tracked a legal challenge against RBI ban for an early session at the Supreme Court today.
Yet, the Supreme Court has declined to give a temporary stay the RBI circular in today’s hearing.
Based on one law firm symbolizing a domestic cryptocurrency exchange, the industry had planned to increase the deadline by a month following a hearing on July 20, the next date for a Supreme Court hearing of the case.
“However, now that the ban will continue, the banking route for the exchanges and its users will be completely choked,” an associate partner at the law firm told Quartz.
Regardless of the challenges, cryptocurrency exchanges are still optimistic following hopeful statements from India’s ruling central government. Last week, the secretary of India’s Department of Economic Affairs Subash Chandra Garg revealed the authority is shifting toward completing the inter-governmental committee on suggesting policies for the crypto industry, confirmed the regulations could be completed with the first fortnight of July.
`We are fairly close to developing a template [for crypto regulations] that we think is in the best interests of the country. We have prepared a draft which we intend to discuss with the committee members in the first week of July.”