In the next two weeks, crypto enthusiasts in India would have a clear stand about their government’s view on cryptocurrency. After going through several petitions filed against the Reserve Bank of India recent ban, the Supreme Court of India has directed the government to issue its stand within two weeks.
Since 2013 the RBI has been issuing stern warnings against the use of cryptocurrency in India. It has not come out officially and declared cryptocurrency is illegal and due to its unofficial stand the industry is in chaos. Furthermore, the recent ban issued in April through a circular to local banks has crippled the cryptocurrency industry in India. The ban prohibits local banks from carrying out any transactions for anyone running any cryptocurrency businesses. Similarly, in the April circular RBI didn’t term cryptocurrency illegal.
It is this recent ban that came into effect in July that led to a magnitude of petitions been filed in the Supreme Court against the ban. The cases have been postponed for some time but this time around the court gave the government a directive. In court, Nakul Dewan lawyer representing nine cryptocurrency exchanges demanded the government states its stand on cryptocurrency. He further said;-
“It’s high time the government gives its final view concerning virtual currency in India. We have employees, and their jobs are at risk as we speak. Furthermore, the government has been sitting on this subject since May.”
On the other hand, RBI lawyer Shyam Divan argued that the financial regulator was merely discouraging the use of virtual currency. Further on he said the final decision is a policy issue that ought to be taken care off by the government.
Effects of the Ban
Although the RBI states it’s only discouraging the use of cryptocurrency on the ground things are different. It’s just recently that co-founders of Uncoin Indians largest exchange were arrested for installing a virtual currency ATM in Bangalore city. Apart from this recent incidence, the RBI ban led to a closure of some exchanges which were initially operating in India. Zebpay, one of Indians largest exchanges, closed down while opening up new firms in Malta. The latter cited financial difficulty as the main reason.
After hearing all the arguments in the court, the Supreme Court Judges Naveen Sinha and RF Nariman led to the issuance of the directive. The Indian cryptocurrency industry has grown significantly, and with the government directed to issue its stand in two weeks’ time if favorable, it will pave the way for more growth.