India's Reserve Bank of India (RBI) Cryptocurrency Restrictions Upheld Despite Hearing Petition

No Temporary Stay Approved For RBI’s Cryptocurrency Restrictions, Despite Hearing Petition

The Indian Supreme Court has been in the financial news of the world lately, due to the recent petition to overrule the previously established crypto banking ban. Their hearing for this amendment occurred on July 3rd, involving the petition from Internet and Mobile Association of India and the response of the Reserve Bank of India (RBI). Ultimately, the final ruling is that there would be no temporary stay approved, and that banks are ordered to stop crypto exchanges within the next two days on July 5th, 2018.

In previous reports, it was suggested that RBI made no attempts to understand and study the ways that cryptocurrency would benefit their country before proclaiming the restriction. They did not establish any kind of internal committee that could investigate the risks or benefits, which made it difficult to get clarity in the crypto world. Investors will now have to make the decision to either wait for the next hearing, sell their tokens, transfer their tokens outside of Indian wallets, or see the other options being provided by each exchange.

Koinex, a crypto exchange, has decided to develop a P2P network called Loop that will offer a crypto-to-crypto platform. Unocoin and Zebpay have followed suit, which is good news for consumers that are not ready to let their cryptocurrency go. Unocoin’s CEO, Sathvik Vishwanath, has also commented that his exchange is working for alternatives that may be more widely accepted. Vishwanath commented,

“Due to the RBI’s recent notification on ‘Prohibition on Dealing in Virtual Currencies,’ our banking relationships are likely to be disrupted on or before July 5th, 2018. We are in the process of deploying new mechanisms for INR deposits and withdrawals.”

Nischal Shetty, the founder and CEO of Wazirx, commented,

“The IAMAI had [also] submitted a representation to the RBI which was a detailed document explaining blockchain, cryptos and how they function. The RBI has said it will respond to that within 7 days…. The representation was made with the belief that if the RBI gets a deep understanding of blockchain and crypto then they may go easy on the ban and think about regulations.”

There is still another hearing scheduled for July 20th, where four other petitions are planned to be heard and considered in this ban. The next weeks will show the local economy approximately how much will change without the use of crypto, which could confirm or question the previous decisions of the bank. Hopefully, the RBI will take the time to review these details more carefully to create an educated decision on the new changes.

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