Over the past few months, India has been a country which is going through quite a tumultuous time when it comes to cryptocurrencies. The legal and financial structure of the country seems to be at odds with the crypto-industry. A circular from the Reserve Bank of India, India’s central banking authority ordered all regulated financial institutions in the nation to deny services to all those who were involved in the crypto trade.
This decision from the country’s apex banking authority led to a major outcry and unrest in the country’s growing crypto-community. Several petitions were filed - online and offline, requesting the RBI to roll back this circular. However - matters have now escalated and the Supreme Court of India is now involved.
The Supreme Court’s Involvement
Multiple cases have been filed against the Reserve Bank of India, the Finance Ministry and other related government bodies - stating that the decision that the RBI has taken is unconstitutional. These petitions state that the circular issued by RBI violates several guidelines of the Indian constitution. The constitution states that all are equal to the law - and that the banks cannot deny services to any trader or a businessman who is dealing in a legal trade or business.
Since India is not outlawing cryptocurrencies - but banks have been asked to deny services to those dealing in cryptos, the decision has been hailed unfair. Kali Digital Ecosystems was the first name in the country to take the legal route and take the banks to the court. This was followed by Flintstone Tech, as well as four other cryptocurrency exchanges who have decided to sue the RBI over this regulation.
The Supreme Court of India has now stated that the High Courts will no longer be accepting any more petitions against the RBI’s order - and that all pending cases will now be transferred to the country’s apex legal body, the Supreme Court. The next hearing is all set to be held on the 20th of July.
Indian Traders Show Enthusiasm Despite Uncertainty
Despite this chaos and confusion regarding the official status of cryptocurrencies and crypto-trading in the country, Indian cryptocurrency traders, as well as the startup economy, continues to be optimistic. A number of crypto-related businesses have started off after the RBI’s decision - including CoinDCX which started operation mere days after the RBI’s order. Over the next few months, Alumna and CoinRecoil are also expected to start off with their operations in the country.
Statistics indicate that the trading volume has seemingly been unaffected. While there was a temporary dip following the RBI’s orders, the recent price gain has brought back a number of investors back into the game and trading volumes are back to what they were pre-RBI circular.
Indian cryptocurrency exchanges have been looking forward to the hearing - hoping for a fair trial. A similar banking embargo was called off in Chile by the court as cryptocurrency exchanges sued the banks. Indian cryptocurrency exchanges have also resorted to crypto-to-crypto trading as another option to circumvent the ban.