2018-7-5 16:09 |
India’s top court just dealt a major blow to the cryptocurrency industry in the country. The nation’s crypto community was stunned when the Supreme Court refused to overturn the Reserve Bank of India’s (RBI) ban, which barred all financial institutions it regulates from dealing with cryptocurrencies.
Supreme Courts Upholds RBI’s BanIndia’s Supreme Court refused to overturn RBI’s restriction on financial institutions from dealing in cryptocurrencies. According to Bloomberg, the top court’s action basically means that cryptocurrency is now virtually outlawed in India.
The Reserve Bank of India issued a circular on April 6, which prohibits financial institutions, banks and other entities regulated by the RBI “from providing any services related to virtual currencies.” The RBI gave a three-month deadline from the directive’s date of issuance, which means that all affected firms must “terminate their existing relationships with firms or individuals dealing in cryptocurrencies” by July 5.
Reserve Bank of India’s Ban QuestionedThis prompted crypto exchanges and firms to initiate legal action against RBI’s ban. For instance, startups such as Kali Digital Ecosystems Pvt Ltd and Flintsone Technologies Pvt Ltd made appeals to various high courts to challenge RBI’s directive.
Even a European Parliament-commissioned study concluded that banning cryptocurrencies outright is not the best solution to the situation. Instead of a ban, the study recommendation to “harmonize such regulations across jurisdictions” considering that cryptocurrency transactions are trans-border in nature and global in scope. In addition, the study further commented that crypto investments “should be taxed similarly to investment in other financial assets.”
Despite the Supreme Court’s latest decision, the fight is far from over. Exchanges accuse that they were “unconstitutionally deprived of their right to do business” by RBI’s ban. Another Supreme Court hearing has already been scheduled for July 20 to settle the dispute.
Zebpay Announces Restrictions on Rupee TransactionsIn response to the Supreme Court’s decision, Singapore-based app wallet Zebpay announced to clients that they would no longer be able to make Indian Rupee withdrawals and deposits. However, it appears that the firm is still hopeful that the situation might be satisfactorily solved in the future judging by its message to clients which read:
“INR deposits and withdrawals have been paused in the Zebpay app until banks allow us again.”
Meanwhile, seasoned crypto traders are not too concerned with Supreme Court’s decision as they remain confident that their operations will not be affected as it will only affect Rupee transactions. Trader Avinash Baboo stated:
“We must understand that only withdrawal (of rupees) will be stopped but other functions like buy and sell/send and receive crypto in Indian exchanges will work.”
Simply put, RBI’s ban may just push the country’s crypto industry towards a P2P exchange model where buyers and sellers will deal with each other directly with the exchange acting as an escrow.
Supreme Court’s Decision on RBI’s Restrictions May Push Crypto Industry Towards a P2P Model was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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