The Indian Supreme Court decided not to lift the ban on banking services for Indian cryptocurrency exchanges. In a court ruling, the Supreme Court in India didn’t want to give even a temporary resolve against the Cryptocurrency banking ban that was issued by the Indian Central Bank. Not only can Indian exchanges not use banking services, but even Indians wanting to buy cryptocurrencies with their bank accounts will be denied.
The ban on banking services will dent the cryptocurrency economy in India
The Indian Central Bank – the Reserve Bank of India had previously issued a ban for all regulated banks and financial institutions to not give financial services to cryptocurrency businesses and exchanges. The ban was issued on April 5th and it also forces banks to refuse their own clients to use their bank accounts to buy cryptocurrencies. Although, the ban had 3 months before it comes to effect, those three months are ending tomorrow, so from July 5th, the ban will be in effect.
The cryptocurrency industry is growing rapidly in India with many people interested in or already bought cryptocurrencies to their account. A lot of people were angry about the ban, which triggered petitions being filed in court to challenge the Indian Central Bank’s decision. Some of the petitions were filed by Indian Crypto exchanges themselves, stating that the prohibition is unconstitutional and unfair.
A similar, but high profile petition was filed by the Indian Mobile and Internet Association in June. They claimed that Crypto exchanges were members of their Association and challenged the Indian Reserve Bank’s decision. The petition also wanted for the Indian Supreme Court to make and early hearing. However, the Indian Supreme Court denied all allegations and petitions, and confirmed that the Banking services ban will stay.
Breaking! Supreme Court of India refuses to grant temporary stay against RBI's banking restriction against Crypto. Stay tuned for further updates! #rbiupdate
— Crypto Kanoon (@cryptokanoon) July 3, 2018
Law firms, representing Indian Cryptocurrency exchanges, have tried to postpone or extend the deadline of the ban by a month or so. An associate partner of one of the law firms stated:
“Now that the Banking ban will continue to be in effect, the route of banking services for exchanges and their users will be choked out.”
Despite the Indian Supreme Court decision, many are optimistic for the future
Despite the negative news, a scheduled Supreme Court hearing on July 20th will have the last word on the subject. There are still some chances that the Supreme Court in India can succumb to the pressure and reverse the prohibition. Indian Exchanges are still optimistic, as the government is working on regulations.
The secretary of the Department of Economic Affairs in India, Subash Chandra Garg confirmed that the government is working on regulations for the Crypto industry in India. Another official from the government committee that proposes policies, has confirmed that regulations are being prepared and they will be in India’s best interest:
“We’re close to developing a template for Cryptocurrency regulations. We think that the template will be in the best interests for the country and the industry. We’ve prepared drafts that will be discussed with committee members in the beginning of July.”
Still, it remains to be seen what the Indian Supreme Court will rule on 20th July. The decision can have a massive impact on the Cryptocurrency Economy in India, so we will report immediately after the Court makes its decision. If you want to read more news from the Cryptocurrency Industry in India, click the links below.
- Indian University partners with IBM to start a Blockchain Education in India
- Tim Draper: India has made a huge mistake in cracking down cryptocurrencies
- Indian exchange Coinsecure hacked. 3.5$ million in Bitcoin stolen
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