March 26, 2019 | AtoZ Markets - Since July 2018, due to a circular released by the Reserve Bank of India (RBI) in April, banks were prohibited from dealing with Bitcoin and cryptocurrency exchanges. The four-week window that the Indian Supreme Court has given to the government to come up with crypto regulation is coming to an end.
Will Indian Bitcoin Ban disappear after 29 March?
The crypto case is listed for March 29, according to court’s advance list. Meanwhile, the community has been putting efforts to bring positive crypto regulation and end ban on banking which was imposed by the central bank. Depending on the result of the hearing, the future of the bitcoin and cryptocurrency exchange market of India will be decided. The deadline that was given to the government by the Supreme Court of India to come up with a regulatory framework for cryptocurrency is drawing near. On February 25, the court gave the government four weeks to produce crypto regulation.
Finance Secretary Subhash Chandra Garg, the Department of Economics Affairs which leads a committee composed of RBI and Ministry of Electronics and Information Technology officials is said to have come to a consensus on not completely dismissing cryptocurrencies as illegal methods of payment.
Efforts to lift RBI bitcoin ban
The RBI issued a circular which prohibits banks from providing services to crypto businesses including exchanges back in April last year. The ban went into effect in July. A few industry participants and stakeholders responded by filing writ petitions against the ban, which the community hopes the supreme court will soon hear. The decision was originally going to be heard on September 11, 2018, but it has been repeatedly postponed.
Member of IAMIA, Nishith Desai Associates lawyer Jaideep Reddy quoted that
“One would hope the case on the RBI circular is decided soon since the industry has been in limbo for nearly a year now.”
As the SC hearing on crypto regulation approaches, there are notable efforts within the crypto community in India to bring positive changes in the crypto space. Meanwhile, the “India Wants Crypto” social media campaign is continually growing in popularity.
On money laundering concerns
There exists a possibility that India reverses the RBI’s Bitcoin ban if the government is concerned about potential money laundering risks. If cryptocurrency trading moves from strictly regulated cryptocurrency exchanges to peer-to-peer platforms, it becomes extremely difficult for the government to prevent the usage of cryptocurrencies in processing illicit proceeds from criminal activities. During a period in which the G20 is gearing towards regulation of bitcoin and cryptocurrency exchanges, it may be challenging for India to exclude itself from the global market.
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