India Supreme Court: Government Given Four Week Cryptocurrency Regulation Deadline
The government has four weeks to come up with a policy framework on cryptocurrencies before the court can make its ruling about the pending case. The crypto-related case has been pending since July 2017 when the government implemented a ban on crypto-related banking activities. This according to a Tweet and video, February 24, 2019.
Decision Violates the Constitution
During its hearing of the case on February 24, 2019, the court gave the government one more chance to come up with a clear policy framework for digital currencies. The court will after that, move onto the crypto banking ban in the country by the central bank, the Reserve Bank of India (RBI).
[Image source: India Today]
The crypto circular was released by the Indian central bank in early April 2018 prohibiting local banks from extending their services to any institution or individual dealing with cryptocurrencies. Even though the High Court of Delhi, which critically assessed the circular, concluded that the decision by RBI to prohibit crypto-related businesses violated the constitution, the Supreme Court remained adamant and supported the RBI ban even after hearing several petitions. Regarding today’s decision, Crypto Kanoon, a platform specializing in blockchain regulatory news & analysis, blockchain events Tweeted:
“Supreme Court has granted four weeks to Indian Government as the final opportunity to bring about a policy (Rules and Regulations) on Cryptocurrencies!”
Cryptocurrencies Cannot be Wished Away
The Reserve Bank of India has maintained its negative stance towards the adoption of cryptocurrencies, but at the same time, it has in the recent past confirmed it was considering the creation of an Indian rupee-backed Central Bank Digital Currency (CBDC). RBI announced its plans in August 2018 but pushed the release of the CBDC to January 2019.
The government-appointed committee asked to research on the crypto subject recently released a report that raised concerns on how digital currencies would actually affect the local fiat currency. While at it, another government-appointed committee presented its report recommending the legalization of cryptocurrencies in the country, explaining that there was a consensus that cryptocurrencies could not merely be wished away and dismissed as illegal.
Welcomed the Order
One of the very first petitioners in this case Advocate Vijay Pal Dalmia said the court at today’s sitting refused to listen to the sides demanding the removal of the ban until the Union of India presents the policy framework, hence the four-week ultimatum. The founder and CEO of cryptocurrency startup WazirX Nischal Shetty has welcomed the new order, saying it was the first time the court had given a clear timeline for the government to honor its word on the crypto regulatory framework.