June 13, 2018 by Ramaa Mohan
The Reserve Bank of India (RBI) is planning to allow cryptocurrency trading with some level of restrictions.
After a rather long wait for the cryptocurrency market in India, the financial regulator and institution; The RBI has announced, according to reports from Congencis, that the government is against the ban of cryptocurrencies in the country.
According to a report from ET, a panel was formed to look into cryptocurrency and how to regulate them at the beginning of April and the panel has finally reached its consensus in favor of the crypto market and the user base in India.
The move, however, seems to be a drastic retraction after the circular they released in the first week of April, ordering all banks, payment gateways and e-wallet service providers that are registered with the RBI to stop dealing in and with cryptocurrencies in the next three months. The deadline, under which said registered companies and banks were supposed to suspend activity, expires on the 5th of July.
The circular caused quite a few platforms and exchanges to pull out of India and move to countries with more favorable regulations and at the same time caused a lot of uproar amongst the Indian crypto community. Several online petitions were filled and signed and many of the leading exchanges challenged the decree in court.
Two of the most prominent lawsuits filed against the RBI, in regard to the circular, were filed by Coindelta, Koinex, Throughbit Exchange and CoinDCX with the Supreme Court of India and the other by CoinRecoil in the Delhi High Court. The latter case had the stronger argument because it had challenged both the RBI as well as the GST council under Article 14 and 19 which talks about equal protection and free trade.
Both cases were allowed into court because there were no said rules and regulations for the cryptocurrency market that allows the RBI to ban or allow their use.
No Prior Research
Interestingly, this announcement of the possible softening of the RBI in the matter of cryptocurrency comes after an RTI reply went viral. The RTI was filed by a crypto enthusiast in the country, demanding to know whether or not there was a panel that was consulted and to see what the basis of the decision was that led to the release of the decree.
— Blockchain Lawyer (@Blockchainlaw91) June 12, 2018
Although no formal announcement has been made by the RBI, it seems inevitable that one, irrespective of which way it goes, will soon be made with regard to cryptocurrencies. In the meantime, the decree’s stipulated time frame and deadline are fast approaching. With less than three weeks to go, all eyes are on the RBI and its counterparts to see where this will go.