Indian crypto regulation framework has been delayed several times in the last year. However, after the Supreme Court’s 4-week ultimatum to the government, the drafting committee in its reply has assured that the framework is in its final stage of deliberation. The Supreme court has to give the deadline in order to hear a pending petition filed against the banking ban of crypto in India
The petition was filed by one Internet and Mobile Association of India (IAMAI), asking the court to lift the ban on crypto use as it is unconstitutional and also hampering the boom of crypto markets in India.
The Supreme court briefly addressed the petition on Monday, while the RBI confirmed that the matter was addressed for a very short period of time. One of the officials was quoted,
“The matter started with the counsel for the Union of India stating that its committee is in the final stages of deliberations and that the matter should be heard after that.”
The court in its short address made it evident to the drafting committee that the $-week ultimatum was the last deadline that has been given out, after hearing the counsels plee. One of the judges said,
“Four weeks time is granted, as the last opportunity, to the Union of India to do the needful.”
RBI Ban Unconstitutional?
The petitioners of the case called the ban put by RBI as unconstitutional and it is hampering the growth of crypto in the country. The petitioners also mentioned the case of Zebpay, which was among the very few crypto exchanges operating in the country, which had to shut their operations after no banks were ready to help them out in opening customer accounts. After hearing the petitioner the council noted that,
“The council also mentioned that with each passing day, employee livelihoods are being lost.”
However, the court also noted that the hearing of the case should be conducted after the 4-week period gets over. A circular released by RBI last April declared crypto an unrecognized entity of use, thus making it illegal for the banks to deal in crypto.
Due to the ban imposed by the RBI, various crypto exchanges operating in the country to shut their operations as withdrawing money in fiat through bank accounts became illegal.
Few exchanges found innovative ways to counter the ban like starting an escrow peer-to-peer service, which would allow the users to hold their digital assets in an escrow until the final regulations are put in place.