India High Court Delays Crypto Hearing
Leila Chin
India’s highest court is deferring the deliberation on the central bank’s decision to prohibit financial institutions from facilitating any transactions with cryptocurrency firms.
The three-judge bench of the Supreme Court of India has scheduled the final hearing on the Reserve Bank of India’s (RBI) crypto ban to September 11, according to a report by Inc42. “The Supreme Court is likely to dispose of the case on September 11, after hearing the arguments from both the parties,” the local report said, quoting Rashmi Deshpande, an associate partner of Khaitan and Co., who represents Kali Digital.
Judges handling the case want all arguments and submissions from both the RBI and the oppositors to be submitted on that day.
“Our expectation is that the hearing will be on the basis of merit where we get to present the case on why the RBI circular is unconstitutional and should be quashed,” Deshpande said.
Such a circular from the Indian central bank would be a loss for the Indian market and its clients, according to Gopal Subramaniam, senior advocate representing the Internet and Mobile Association of India (IAMAI).
“The bench seemed receptive. We hope to get a longer hearing from the bench on the next hearing,” Abhishek G, co-founder and chief executive officer of Indian cryptocurrency Exchange ThroughBit, said.
“The policy of RBI is of extreme caution,” Bar and Bench reported, quoting a senior advocate representing the RBI, adding virtual currencies could solicit illegal transactions.
In April, the RBI announced that all regulated financial institutions were barred from providing services to crypto exchanges and enterprises. They were given three months to ditch their dealings with such crypto entities that will begin from the ban’s imposition on July 6.
Earlier this month, the country’s highest court backed the RBI ban on transactions between crypto bourses and regulated financial companies.
“It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling [cryptocurrencies]. Regulated entities which already provide such services shall exit the relationship within a specified time,” the RBI had said in a statement.
In an earlier court proceeding, the Indian central bank had argued that digital coins such as bitcoin and ethereum cannot be classified as currency in the country since the existing laws require coins to be created using metal and to have a stamp by the government.
The central bank announced a creation of a group studying the likelihood of issuing its own virtual currencies.
“Rapid changes in the landscape of the payments industry along with factors such as [the] emergence of private digital tokens and the rising costs of managing fiat paper/metallic money have led central banks around the world to explore the option of introducing fiat digital currencies,” the RBI said at that time.
“While many central banks are still engaged in the debate, an inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency,” it added.
