Following the final day of formal hearings in India regarding the central bank’s ban on businesses and individuals that transact Bitcoin and other cryptocurrencies, the supreme court has decided to rehear arguments on September 25th, leaving the door open to a new stance on digital assets.
The Reserve Bank of India (RBI) has now been granted time to reconsider the crackdown on crypto it initiated in April 2018 when it released a circular prohibiting regulated entities such as banks and financial institutions from servicing crypto clients.
According to Justice Nariman,
“Exchanges are not asking to uplift the ban but they are only asking to reconsider. If you don’t give answer to it, I will pass the judgement.”
The case, IAMAI v. RBI, has focused on RBI’s legal authority to prohibit banks from servicing clients who use cryptocurrencies. Advocating on behalf of crypto exchanges and other related business, the Internet and Mobile Association of India (IAMAI) has argued that RBI’s circular against private companies was unconstitutional.
According to IAMAI counsel Ashim Sood,
“RBI cannot step out of its powers as set out in the Banking Regulation Act. Therefore, its action against private businesses in the form of a circular is illegal.”
India’s crackdown has forced blockchain developers to flee and major exchanges such as Zebpay to relocate to crypto-friendly jurisdictions such as Malta where lawmakers have laid out clear regulatory guidelines to support the growth of the industry.
IAMAI claims that the central bank banned crypto on “moral grounds” without presenting research on how cryptocurrencies would impact the economy.
As today’s hearing unfolded, evidence of research became a major focus as the judge also challenged RBI’s concern for consumer protection,