India’s highest court decided to maintain a ban that bars the country’s banks from doing business with cryptocurrency exchanges.
The ban was originally announced in April, when the Reserve Bank of India (RBI) said that all financial institutions within the country would not be allowed to work with cryptocurrency exchanges. The policy gave banks 3 months to exit the markets, making July 6th the official start date of the ban.
The RBI released a statement at the original time of the ban, saying:
“It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling cryptocurrencies. Regulated entities which already provide such services shall exit the relationship within a specified time.”
The Indian Supreme Court, led by Chief Justice Dipak Misra, said on Tuesday that the ban implemented in April would remain in place. The Indian Supreme Court also barred all of the country’s other courts from accepting petitions from cryptocurrency exchanges affected by the ban.
Although many countries are taking steps to protect investors from scams and to enforce the legal use of cryptocurrencies, India is taking a much harsher stance on the issue, more in line with that of China’s government. The RBI made the case to the Supreme Court that virtual currencies cannot be treated as actual currencies because India’s law requires that coins must exist in a physical form and be stamped by the government.
At the initial time of the ban, there was speculation that the country was preparing to issue a digital Rupee sparked by Indian cryptocurrency exchange PocketBits.
“We cannot comment on the times ahead but there is no need to panic, RBI has just reiterated what they have already implemented, THERE IS NO BAN ON BITCOIN in India as of yet, there is no official stand of the government on this. This is just the Central Bank of India taking a stand against a technology which they are going to implement themselves in terms of a Digital Rupee,” said PocketBits.
After RBI argued that currency must be physical, however, it is unlikely that they are preparing to use a digital Rupee.