The Supreme Court of India refused to lift the ban imposed by the central bank, which prohibits the country's crypto-exchange facilities from using the services of regulated financial organizations.
According to Bloomberg, the Supreme Court of India and its Chief Justice Dipak Misra said that the prohibition of the Reserve Bank of India (RBI) to provide services to companies associated with cryptocurrencies "will remain in force".
This decision supports the ban imposed by the Central Bank of the country in April this year. Then RBI issued a circular prohibiting banks in India to serve crypto-exchanges or associated companies. The banks had three months to withdraw from the market - on July 6, the ban should enter into force.
This policy was acutely perceived by the participants in the crypto community. Five lawsuits were filed in the courts of India, after which the Supreme Court prohibited all other judicial institutions from accepting such motions before the July 20 hearing. Then it was reported that on this day the Supreme Court will make a final decision on this issue.
According to Quartz, the hearing was held on July 3, instead of the 20th, after the Internet and Mobile Association of India (IAMAI), which includes crypto-exchanges, requested a preliminary hearing.
Representatives of the RBI claimed during the hearing that cryptocurrencies, including Bitcoin, cannot be considered a currency in India, as the law of the country requires that the coins "be made of metal or exist in physical form and be issued by the government". The struggle in the Supreme Court is not over yet, as the July 20 hearing is still scheduled to be held.
In June of this year, lawyers representing crypto-exchanges requested clarification from RBI about the ban in accordance with the national law on the right to information. According to the replies received, this decision was not the result of any special studies or discussions by the regulatory body. The Central Bank of the country simply could not justify the ban.
In all this history, the Supreme Court of India takes an ambiguous position. In late April, he published a notice in which he argued that the RBI decision to ban cryptocurrency business violated the Indian constitution. However, three weeks after this, the court refused a request for a temporary ban on imposing restrictions on banks for cryptocurrency companies by the Central Bank of India.
This attitude is very disturbing to the representatives of the crypto-community of India. After all, if the court eventually ruled in favor of the Central Bank, it would be equivalent to a ban on cryptocurrency transactions in the country. Then the local stock exchanges will have no choice but to move operations abroad, which increases the risks for both companies and users.