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India's Supreme Court Refuses To Stay RBI Ban On Banks' Crypto Services


Indian Supreme Court has refused to stay the central bank's ban on the country's commercial banks from providing services to investors in digital currencies.

In a writ petition challenging the ban, a group of lawyers pleaded with the apex court to allow banks to continue serving cryptocurrency clients as they had prior to the RBI ban.

A three-judge bench headed by Supreme Court Chief Justice Deepak Mishra declined an interim injunction on the RBI circular dated April 6.

The Supreme Court has also directed that no state High Court will entertain any petition relating to the matter. All the cases on this topic will be merged with the existing petitions and will be heard by the Supreme Court collectively, as per the central bank's request.

Several cryptocurrency traders had approached High Courts in the country challenging the central bank's ban.

The Division Bench also said that "The petitioners shall be at liberty to submit a representation to the competent authority of RBI within two weeks."

Next hearing of the case has been posted for July 20, two weeks after the RBI deadline to close down all crypto-related bank accounts.

Firms or individuals in India are not allowed to avail the services of the country's banks, e-wallets, and payment gateway providers to purchase and sell cryptocurrencies after the Reserve Bank on April 6 slapped a ban on banks providing services to investors in digital currencies.

In its monetary policy review, the Reserve Bank Deputy Governor Bibhu Prasad Kanungo said the decision was taken in view of "the associated risks".

The central bank asked banks already providing such services to cryptocurrency investors to stop them within three months.

Blockchain developers, services providers, and companies dealing in cryptocurrency trading in India are reportedly migrating to crypto-friendly destinations or are seriously considering the option in the wake of increasingly hostile ecosystem in the country.

Although not banned by law, cryptocurrency trading is under tight scrutiny and restrictions in India.

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