India’s complicated relationship with
cryptocurrencies and firms dealing with them has now reached the courts.
On April 22, the Delhi high court issued a notice to the Reserve Bank of India (RBI) after a petition challenged the banking regulator’s April 06 order barring lenders from doing business with cryptocurrency exchanges. The RBI directive told banks to wind up their existing business relationships with such firms by July this year, signalling the end of the road for several entities in the Indian virtual currency ecosystem.
The petition was filed by Kali Digital Eco-Systems, which had plans to launch its own cryptocurrency exchange, CoinRecoil, in August 2018. The Ahmedabad-based firm has challenged the RBI order on two grounds: Under Article 19(1) (g) of the Indian constitution, which allows citizens to enjoy the right to carry on any occupation, trade, or business; and Article 14, which prohibits discrimination and mandates equal protection under the law for all.
Besides the banking regulator, Kali’s petition also includes the government of India and the goods and services tax (GST) Council. The petition states that it’s the government that has empowered the RBI to take such drastic measures against exchanges, and the GST Council hasn’t yet formulated the requisite rules for digital currencies, causing the present situation to arise.
The next hearing of the case is scheduled for May 24.
The Narendra Modi government, meanwhile, has set up a committee under Subhash Garg, secretary of economic affairs in the finance ministry, to prepare a draft law for bitcoin and other cryptocurrencies. The panel’s report is likely to be submitted by March 2019.
NilecoinTeam
