The Supreme Court of India refused on Tuesday to remove the restrictions imposed by the central bank of the country on the cryptocurrency activity of local financial companies. This is reported by Quatz India.
On April 5, the Reserve Bank of India sent a notice to all financial institutions under its control, which officially prohibited them from providing services to companies operating in the field of cryptocurrency. In addition, the banks were instructed not to carry out transactions that their customers can use to purchase cryptocurrency. Officially, the regulation of the regulator takes effect on July 5.
The decision tried to challenge a number of cryptocurrency companies, which called it "arbitrary, unjust and unconstitutional." The Supreme Court responded to the stormy reaction of the public and promised to consider the petitions received, whose signatories demanded that the decision of the Central Bank be canceled, but refused to accept new applications.
However, based on the results of today's hearing, the court refused to issue a temporary restriction on the decision of the RBI.
As one of the legal companies representing the local stock exchange cryptocurrency said, the participants in the process asked to postpone the deadline for the decision to enter into force for another month. "However, now that the ban was approved, the banking channels for exchanges and their users were completely cut," the partner of the law firm told Quartz.
Nevertheless, representatives of the local crypto-currency industry do not lose hope. Last week, the secretary of the Ministry of Economy of India confirmed that the authorities are at the final stage of developing legislation to regulate the sphere of crypto-currencies. It is expected that it will be submitted within two weeks.
We have prepared a draft (on virtual currencies) that entails what parts of this businesses should be banned and what should be preserved. This should be discussed by the first week of July and we should wrap this up within in the first fortnight of July.
Subhash Chandra Garg
Secretary, India department of economic affairs
The next hearing, during which representatives of the cryptocurrency industry will try to challenge the decision of the Reserve Bank of India, is scheduled for July 20.