India’s Supreme Court has upheld the central bank’s directive of prohibiting banks from offering services to the domestic cryptocurrency sector following a hearing today.
On Friday, India’s Supreme Court held its latest hearing of the case against the Reserve Bank of India’s (RBI) circular forbidding all regulated financial institutions, including banks, to provide services to business in the cryptocurrency sector. Introduced in April, the policy also forbade banks from allowing their own retail customers from purchasing cryptocurrencies through bank accounts. The ban came into effect on July 5, after an unsuccessful final-hour attempt to convince the Supreme Court to delay the ban earlier this month.
The petition was put forth to chief justice Dipak Misra and justices AM Khanwilkar and DY Chandrachud with India’s attorney general KK Venugopal also present, underlining the significance of the matter.
The hearing saw ‘limited arguments’ brought forward by lawyers on behalf of the Internet and Mobile Association of India (IAMAI), which counts domestic cryptocurrency exchanges as its members, and the Reserve Bank of India. The lack of opinions from other prominent authorities in response to the regulation-seeking petition by the cryptocurrency sector has seen the Supreme Court defer the date of hearing again, with final arguments to be heard on September 11.
CryptoKanoon, a domestic industry news resource following India’s cryptocurrency saga tweeted:
Representing the IAMAI and the cryptocurrency sector, senior advocate Gopal Subramaniam underlined the severity of the matter surrounding the RBI circular and called for the hearing to be heard without any further delays.
Appearing for the central bank, senior advocate Shyam Divan also called for a final hearing while claiming cryptocurrency could encourage illegal transactions, according to Indian legal news blog Bar&Bench.
He reportedly stated:
“The policy of RBI is of extreme caution.”
The advocate representing the cryptocurrency industry argued Indian adopters and the wider Indian market stand to lose among global counterparts as a result of the RBI-led banking curbs.
While September 11 is shaping up to be judgment day for the domestic cryptocurrency sector, an unlikely ally could see India’s government could bring respite to adopters and the wider ecosystem by establishing regulations, currently in draft, to effectively recognize and legalize the sector in the near future.
As reported by CCN last week, an inter-governmental committee of multiple ministries tasked to form a framework for the cryptocurrency sector isn’t considering any outright ban of cryptocurrency trading. Instead, authorities could enforce new regulatory norms that are likely to classify cryptocurrencies as commodities.