India’s Supreme Court will hear final arguments on petitions challenging the virtual ban imposed by the Reserve Bank of India (RBI) on cryptocurrency exchanges today. In April this year, the RBI had asked regulated entities to not get involved with cryptocurrency traders, firms, or individuals, imposing a virtual ban. The RBI decision was challenged by cryptocurrency exchanges in the Supreme Court.
Here’s what has happened so far:
- After October last year, Bitcoin, the most popular cryptocurrency began gaining value. Between October and December, Bitcoin rose from $5,000 to about $20,000. This led to a lot of buzz, even gaining the attention of authorities.
- In November 2017, a lawyer named Dwaipayan Bhowmick filed a Public Interest Litigation (PIL) seeking regulation on cryptocurrencies.
- Between December and February, the government reiterated several times that cryptocurrencies were not legal tender. In Budget 2018, Finance Minister Arun Jaitley said again the government did not consider cryptocurrencies as legal tender and would do everything to eliminate the creation of crypto assets.
- On April 5, the RBI asked entities regulated by it to terminate their business relationships with firms and individuals dealing in cryptocurrencies. “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 VCs. Regulated entities which already provide such services shall exit the relationship within a specified time,” the RBI said. The RBI set the last date for ceasing all such relationship on July 5.
- In April, Ahmedabad-based Kali Digital Eco-Systems, which runs the crypto exchange CoinRecoil moved the Delhi High Court challenging the RBI’s virtual ban.
- Later, a number of petitions were filed against the RBI decision, the Supreme Court stepped in and said that it will hear a clutch of petitions together. On May 11, the apex court issued a notice to the RBI and the central government to respond to the petitions.
- On July 3, the Supreme Court refused to grant interim relief to cryptocurrency players.
- From July 6, the RBI ban kicked-in.
- On July 20, the RBI stood by its decision of virtual ban. It told the Supreme Court that cryptocurrencies are immune from state regulation, cannot be regulated and will lead to illegal transactions.
- The RBI and the central government asked for three week time for filing responses to petitions. The next date for the hearing was set for September 11.
- On September 11, the matter was postponed to September 12 for hearing due to lack of time before the SC bench.
- On September 12, RBI once again reiterated that cryptocurrencies cannot be considered valid currency or money under the existing legal system. The hearing was postponed as many of the responders, except for the RBI, were not able to file their responses.