The Supreme Court has come down heavily on crypto currencies, sanctifying an earlier RBI order for all financial institutions in India to desist from dealing with Crypto currencies such as Bitcoin. This Supreme Court order was passed on Wednesday (July 4) and will come into effect on Friday.
Without a proper government guideline – the government neither endorses nor bans crypto currencies – this top court order would now act as the thumb rule for all banks and financial institutions.
The RBI circular in this regard was challenged at the top court by crypto exchanges, which said that this order needs to be rescinded. The matter comes up for hearing again on July 20.
The exchanges had, while asking for the staying of the RBI order, has also given suggestions as to how other jurisdictions deal with such “currencies”. Only in Japan are crypto currencies legal, hence also controlled.
A committee headed by department of economic affairs secretary Subhash Chandra Garg, is deliberating on the issue and its outcome is awaited. This committee was set up in 2017.
The exchanges, which already have large chunks of money invested, want to stay in business and have decided to carry crypto to crypto trading, though how it will benefit investors in the long run if the ban stays, is not clear. The cash/money component of these exchanges will be on hold as of now, say reports.
– India Legal Bureau