Baat Niklegi To Phir… Door Talak Jayegi (If word goes out, it will spread too far). The famous line penned down by Kafeel Aazar Amrohi and sung by Jagjit Singh reverberates around in the context of virtual currencies.
The virtual currency is in soup India as the Indian government is doing everything to scuttle the growth of virtual currencies such as Bitcoin, Litecoin, Ripple, and Ethereum, among others in the country.
The last nail in the coffin was put by RBI when the central bank, in a new ruling, barred banks from dealing in cryptocurrencies in April this year. The RBI circular mandated banks, e-wallets, and payment gateway providers to withdraw support for cryptocurrency exchanges and other businesses related to virtual currencies in India.
The circular also mandated financial institutions to block services to crypto-related businesses by July 5.
The matter has now reached the Supreme Court (SC) where it will hear all matters relating to the recent RBI diktat against virtual currencies.
The apex court directed the transfer of pending petitions, two in Delhi High Court and one in Calcutta High Court, to the Supreme Court. The SC has decided next date for hearing on July 20.
Meanwhile, the top court also suggested petitioners to make representations to the RBI regarding the circular within two weeks. It means that petitioners can showcase self-regulatory policies such as Know Your Customer (KYC) and Anti-money Laundering (AML) to central bank officials.
The central bank’s circular triggered panic among cryptocurrency exchanges and traders who filed a total of five writ petitions arguing the circular was not preceded by any stakeholder consultation.
A few days ago, the blockchain platform Theblockchainstory filed a petition in the Supreme Court against the Reserve Bank of India (RBI) clampdown on virtual currency.
In a first instance by any representing body, the Internet and Mobile Association of India on Thursday filed a writ petition in the Supreme Court to put a stay on the RBI decision.
The Delhi High Court recently dismissed a writ petition filed by a crypto trader which said that the central bank’s rule infringed his right to carry on an occupation. The court disagreed, ruling that the circular came under the Banking Regulation Act and that such policy matters cannot be interfered with by the court.
As the SC has decided the next hearing date on July 20, it seems that regulatory haze gripping the fate of cryptocurrency in the country set to settle. The stakeholders of cryptocurrency business (exchange, traders etc.) are awaiting the apex court verdict eagerly.
The development was first reported by ET.