Since the Reserve Bank of India announced a blanket halt to all official crypto-currency trading in April, the country’s authorities have moved cautiously. Photo: The Indian Express
The Reserve Bank of India imposed a de facto ban on cryptocurrencies when it prohibited banks from conducting any transactions or dealings involving digital assets and related services in 2018. Photo: The Indian Express

The Supreme Court of India, at a July 20 hearing, has upheld its decision to impose a national ban on digital currencies and will reconvene in September to pass further judgement. The petition from the Internet and Mobile Association of India, that challenged an April move by the Reserve Bank of India (RBI) to ban dealings between banks and crypto-currency entities, only brought what were described in court as “limited arguments.”

The Supreme Court has now deferred the hearing until September 11 saying it has a lack of other opinions on the matter.

In April, the RBI issued a ban on crypto-currencies saying it had “repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies”. However, Indian media reports have lately begun to speculate that crypto-currencies would no longer be banned but instead treated as commodities.

In a recent interview with TV channel ET, Subhash Chandra Garg, Secretary of the government’s Department of Economic Affairs, said that regulatory guidelines were in the works. “We are fairly close to developing a kind of template that we think might be in the best interests of the country,” he said.

However, blockchain lawyer Varun Sethi told Asia Times last week that the government did no research before banning crypto-currencies.

“There was no apparent reason explained by RBI for this. However subsequently, when litigation was filed by crypto exchanges in Supreme Court against RBI, it stated in its response that the action was taken as a measure of investor protection.”

Sethi added that because of the lack of reasoning for a ban, he helped file a ‘right to information’ application. “In that response, they stated that the ban was not backed by any research or recommendation based on any internal committee.”

When approached about the ‘delay’ in judgement, Sethi said: “There isn’t any delay. The matter is being heard in the Supreme Court and in the last hearing on July 20 it was decided that all parties shall be given four weeks to present their final written submissions.”

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