The Reserve Bank of India (RBI), the country’s central bank, recently told the country’s Supreme Court that cryptocurrency regulations are necessary, as cryptos like bitcoin encourage “illegal transactions.”
According to local news outlet Financial Express the RBI, through senior counsel Shyam Divan, argued to a bench led by Chief Justice Dipak Misra that cryptocurrencies are necessary as they’re a “particular means” that “encourages illegal transactions” and affects the “international flow of funds.”
Earlier this year the Indian government, via the Ministry of Finance, set up a committee to examine the country’s cryptocurrency scene. Per the news outlet an interdisciplinary committee led by Subhash Garg, secretary of economic affairs at the Ministry, is yet to present a report on potential crypto regulations.
Back in April, the RBI ordered all local financial institutions to bring their banking relationships with cryptocurrency-related businesses to an end citing high risks. In July, the Supreme court backed the central bank’s decision, effectively banning crypto activity.
A petition asking the central bank to backpedal its decision got over 22,000 signatures, but the ban moved forward. The move was a big blow to companies in the sector and after a three-month grace period was over, the ban came into effect.
India’s Supreme Court has now delayed a final hearing on RBI’s crypto-related ban to September 11, after Gopal Subramanium, appearing for petitioners, argued the RBI’s move was “baseless.” Per Financial Express, he argued:
In today’s tech world, transactions are done online and you need banks for that. This issue should concern the government.
The central bank’s move rallied up the cryptocurrency community, to the point eccentric cybersecurity pioneer and bitcoin bull John McAfee asked it to “stand together and act” against the RBI, while reacting to a piece that reported on an order imposed on financial institutions to stop servicing crypto clients.
Per the news outlet, various Public Interest litigations (PILs) – used to “raise issues of broad public concern” - challenging RBI’s move have been filed on the ban, with one coming from a group of “eleven different representatives from various crypto-related businesses.”
Earlier this month a local news channel revealed India wasn’t going to ban cryptocurrencies, but would instead label them commodities.