SC reserves order on plea challenging Reserve Bank's decision to ban cryptocurrency

The Supreme Court on Tuesday reserved its judgment regarding pleas challenging Reserve Bank of India's (RBI) decision about barring banking services from dealing in any transaction where cryptocurrency is involved. Justice RF Nariman who was heading the bench has reserved the order after hearing arguments from all the parties in the matter.

The Internet and Mobile Association of India (IAMAI) had approached the Apex court objecting to a 2018 RBI circular that issued directions to the regulated entities not to deal with cryptocurrencies. IAMAI members carry out cryptocurrency exchanges amongst each other. IAMAI in its argument claimed that RBI's move had effectively banned legitimate business activity via virtual currencies (VCs).

The regulatory body had, on April 6, 2018, issued a circular directing that all the entities regulated by it shall not deal in virtual currencies or provide services to any person or entity for facilitating in dealing it.

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FM Sitharaman on cryptocurrencies

While addressing the media on October 20, Union Finance Minister Nirmala Sitharaman had stated that many countries had cautioned India against rushing into cryptocurrencies. Nirmala's statement came after Facebook's proposed virtual currency Libra became a buzzword during the annual meeting of the International Monetary Fund and the World Bank. In fact, Reserve Bank of India Governor Shantikanta Das spoke about cryptocurrencies during one of the interventions this week.

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"On our side, the Reserve Bank Governor spoke about it during our turn to intervene. I got the sense that many countries were cautioning on rushing into this," Sitharaman told a group of Indian reporters.

"Some of them (countries) of course even suggested that they shouldn't be using, all of us shouldn't be using the name stable currency because that's the expression they used. Many cautioned to the extent saying even the name should not be stable currency, it should relate to virtual currency or something of the kind," the Finance Minister added.

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(With ANI inputs)