Indian Supreme Court Postpones Important Crypto Decision, Blockade Continues

Cryptocurrency just took center stage in India’s highest judicial forum. The nation’s Supreme Court held a July 20th hearing on the domestic blanket ban against traditional finance players facilitating crypto commerce. The ban stands for now, with the high court postponing the final verdict to September 11th, 2018.

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More Limbo for Indian Crypto Exchanges

The fate of the domestic cryptoeconomy in India hangs in a balance as the Supreme Court of India has officially delayed the much-awaited verdict on the Reserve Bank of India’s (RBI) poorly-researched banking blockade on crypto. The court also refused to grant an interim stay against the central bank’s hardline approach towards the Indian crypto sector. 

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Dwaipayan Bhowmick, an Indian advocate who has filed a petition against the domestic crypto-banking crackdown, told Bitsonline by phone:

“Shyam Divan, senior advocate of RBI, asked for the final disposal date of the hearing. As a response, Chief Justice of India, Deepak Mishra — [per] the view of Gopal Subramanyam, an advocate representing the Internet and Mobile Association of India (IAMAI) — has said that 11th September is the final date of hearing.”

“SEBI and exchanges were not present with the counter affidavit. The Justice Mishra ordered to finish all the proceedings in a month from now,” Bhowmick added.

In the Indian judicial system, the pendency of a case is common. The July 20th hearing saw limited arguments from RBI, and the Securities and Exchange Board of India (SEBI) failed to file their response on the matter, prompting the postponement.

Kunal Barchha, CEO of CoinRecoil — one of the exchanges that filed a petition against RBI’s rather draconian ban — noted to me via phone that September 11th may prove “the last and final date to decide the fate of cryptocurrency in India.”

The Here and Now, and Looking Ahead

In general, most elements of the Indian government have held cynical stances towards crypto in recent months. However, the RBI’s April circular barring banks from facilitating crypto businesses was widely regarded as a shocker — a reality that has accordingly choked a considerable amount of cryptocurrency activity in the country.

Indeed, since the RBI’s hardline judgment, Indian crypto exchanges have had no quarter. And, in some places, the government’s approach to curbing crypto businesses has had a reverse reaction, insofar as some domestic crypto activity has switched to far less regulated cash dealings. 

Recently, news portal Quartz reported that, beyond the banking ban, cryptocurrency eventually be regulated as a commodity in India. 

Is crypto as “commodity” just over the horizon in India?

An anonymous and reportedly senior government official told Quartz:

“I don’t think anyone is really thinking of banning it [crypto] altogether. The issue here is about regulating the trade and we need to know where the money is coming from. Allowing it as commodity may let us better regulate trade and so that is being looked at.”

Meanwhile, in an attempt to bypass the banking freeze that restricts fiat-to-crypto trading, many Indian crypto-asset exchanges have been switching to crypto-to-crypto trading, notably Zebpay, Unocoin, and Koinex.

Joseph Lubin, co-founder of Ethereum, also recently shared his perspective on the cryptocurrency atmosphere in India, saying he was confident that India will embrace blockchain technology but emphasized that it will take time before regulators learn about the advantages of digital currencies.

Sounds about right, we think. For now we wait and see.

Will the Indian supreme court lift the cryptoeconomy banking blockade in September?  Share your views in the comments section.


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