Supreme Court Keeps Ban On Banks’ Cryptocurrency Services

Published on 14 May 2018 by Shivi

A group of 11 people had filed a writ petition in the Supreme Court to challenge the decision of the Reserve Bank of India that blocks services of cryptocurrency- related businesses in India. The case has been listed for further hearing on May 17, 2018.

The apex court has refused to grant a temporary injunction against restrictions imposed on banks regarding cryptocurrency by RBI. The Reserve Bank of India had (RBI) issued a circular banning crypto service, which will remain in place at least until a formal hearing.

On April 6, 2018, the RBI made it compulsory for banks, e-wallets and payment gateways to withdraw any support for cryptocurrency exchanges and other businesses dealing with virtual currencies in India.

A writ petition was filed by 11 representatives of different cryptocurrency-related businesses to challenge the constitutional validity of the RBI’s decision.

The RBI’s circular mandates financial institutions to block services by July 5, 2018, putting crypto-related businesses at a risk. In this case, the writ is primarily to see if the government action is constitutionally sound.

The Indian government has set up a committee under Subhash Chandra Garg, Secretary, Department of Economic Affairs that is currently working on a framework to regulate cryptocurrencies. The committee is yet to come out with its decision.

Tags: Cryptocurrency 

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