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India’s top court has refused to grant any interim relief to cryptocurrency exchanges against the Reserve Bank of India’s (RBI) crackdown on them.
The RBI had directed all banks to wind up within three months any existing banking relationships with virtual currency exchanges and traders, was the decision on April 05. The ban kicks in from July 06.
In May, India’s top court had set the next date for the hearing of the case on July 20, two weeks after the ban would come into force. But the Internet and Mobile Association of India (IAMAI), which counts bitcoin exchanges as its members, subsequently approached the court for an early hearing, which took placed on July 03.
India’s Top Court Refused to lift
“This a win for the RBI and a big blow to virtual currency exchanges and traders. In our earlier request to the RBI as well, we had asked it to extend the deadline by a month after the July 20 hearing,” said Rashmi Deshpande, associate partner at Khaitan & Co.
Khaitan & Co is a law firm representing Kali Digital Eco-Systems, an Indian exchange planning to begin operations later this year.
“However, now that the ban will continue, the banking route for the exchanges and its users will be completely choked,” Deshpande added.
On May 17, during the previous hearing, the apex court had asked these exchanges to submit their representation against the central bank. The firms had engaged with the RBI during the last week of May and early June.
“We had submitted a detailed presentation that could have given RBI a clearer picture of what is blockchain, how the exchanges work, etc. But we hadn’t heard back from them yet,” said Nischal Shetty, founder, and CEO of WazirX, another Indian cryptocurrency exchange that has challenged the ban. “Today, the (India’s) supreme court has also directed the RBI to respond to those representations made by the firms in the next seven days.”
Focus on Bitcoin and Blockchain
The Narendra Modi government is in the final stages of finalizing the draft regulation on bitcoin and other currencies, according to a senior government official. That’s why despite India’s top court upholding the ban, the exchanges are hopeful.
“We have prepared a draft (on virtual currencies) that entails what parts of these businesses should be banned and what should be preserved. This should be discussed by the first week of July and we should wrap this up within in the first fortnight of July,” said Subhash Chandra Garg, secretary in the department of economic affairs, who is heading a committee on cryptocurrency regulation, told television news channel ET last month.
What to say?
All eyes are on the government and the next supreme court hearing on July 20. We will see. The truth is only one: crypto is spreading and nothing can stop that!
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