In brief.
- The Reserve Bank of India (RBI) is seeking to file a review petition with the Supreme Court, asking to reinstate a circular that restricts cryptocurrencies in the country.
- In April 2018, the RBI barred banks from dealing with any crypto-related companies.
- The ban was overturned by India's Supreme Court on March 4, opening the way for crypto exchanges to once again operate in the country.
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The Reserve Bank of India (RBI) intends to file a review petition with the Supreme Court, asking to reinstate a circular that restricts cryptocurrencies in the country. The central bank is concerned that lifting the ban “could pave the way for trading in virtual currencies and put the banking system at risk,” Economic Times reported today, citing sources close to the situation.
On March 4, India’s Supreme Court overturned the RBI’s ban on crypto, once again allowing digital asset exchanges to operate in the country. Executives from the crypto industry were unsurprisingly optimistic about the ruling, which opened up a major market for cryptocurrencies for the first time in nearly two years.
The RBI pushes back
Now it looks like the RBI wasn’t too happy with the outcome. However, legal experts claim that the central bank’s petition most likely won’t impact the status of cryptocurrency platforms in India.
“SC [Supreme Court] may look at the RBI’s review petition but as of now, the cryptocurrency platforms can operate in India,” Abhishek A Rastogi, partner at law firm Khaitan & Co, told Economic Times. “Many companies have even gone bankrupt after the RBI’s diktat and they may also look to initiate action in this regard.”
As Decrypt reported previously, on April 5, 2018, the RBI barred banks from dealing with any crypto-related companies, stating that entities regulated by it could not deal with or provide services to “any individual or business entities dealing with or settling virtual currencies (VCs).”
The lack of banking services made it virtually impossible for local crypto exchanges to process deposits and withdrawals, with many companies shutting down or relocating. Over the past two years, top Indian crypto firms lobbied against the RBI’s decision, fighting it out in the Supreme Court. News of the ban’s lifting prompted a surge in the price of WRX, the native token of WazirX, an Indian crypto exchange recently acquired by Binance.