The case against the crypto banking ban by the Reserve Bank of India (RBI) was heard at the country’s supreme court on Thursday. The court subsequently decided to hear the petitions against the RBI ban as a separate issue from the government’s committee report at the end of February.
New Date Set
The Indian supreme court was scheduled to hear the petitions against the crypto banking ban imposed by the country’s central bank, the RBI, on Tuesday after repeatedly postponing it last year.
The case was finally heard on Thursday. According to Twitter account Crypto Kanoon, an Indian platform for blockchain regulatory news and analysis, the “counsel for exchanges argued that constitutional validity of RBI banking ban should be heard as a separate issue than the govt. committee report.” Since the “court was tied up with other pre-scheduled matters in coming weeks,” the case against the RBI ban has been scheduled for the end of February. The user added:
Now it will come for hearing on 26th Feb on ‘top of the list’ i.e., it will be at serial no. 1 on the Cause List.
After many postponements throughout the second half of last year, few expected the case to be heard this week. Quartz India talked to a lawyer representing some of the crypto exchanges who said on Monday that “The case … is unlikely to come up for hearing this entire week.” In November’s hearing, lawyers representing crypto exchanges asked the court for a full-day hearing “so that the case could be expedited,” the news outlet noted, adding that “Despite this, delays are expected.”
RBI Ban and Crypto Regulation
The RBI issued a circular on April 6 last year banning regulated financial institutions from providing services to customers and businesses dealing with cryptocurrencies. The ban took effect in July and crypto exchanges’ bank accounts were closed. A number of petitions have been filed with the court to lift the ban.
Most crypto exchanges in India responded to the banking restriction by launching exchange-escrowed peer-to-peer (P2P) services which have reportedly gained popularity. One of the country’s largest exchanges, Zebpay, shut down its exchange operations in India due to the banking problem. Another major exchange, Unocoin, tried to launch fiat kiosks but ran into trouble with the law when officers mistook its first machine for an ATM that violates the RBI ban.
Recently, there have also been reports of banks, such as Kotak Mahindra Bank and Digibank, closing the accounts of customers they found making crypto-related transactions. However, Indian crypto traders and users have reportedly found a way to bypass banks closing their accounts.
Meanwhile, the regulatory framework for cryptocurrencies is being drafted by a panel headed by the country’s Secretary of the Department of Economic Affairs, Subhash Chandra Garg. Furthermore, the finance ministry recently updated Parliament on its crypto regulatory progress but said that there is no specific timeline for clear recommendations.
Editor’s Note: This article has been updated to reflect the reason the supreme court scheduled the case against RBI’s crypto banking ban for the end of February.
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Images courtesy of Shutterstock and the RBI.
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