India’s Supreme Court has picked a date to hear petitions against the order of the Reserve Bank of India (RBI), the country’s central bank, prohibiting banks from dealing with digital currencies.
The highest judicial forum in India will hold the hearing on July 20, according to local media reports. It will center on five petitions challenging an RBI circular issued last month. India’s central bank has made it illegal for financial institutions to provide services to companies or individuals engaged in cryptocurrencies.
“In view of the associated risks, 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 [cryptocurrencies].”
Among the petitions received by the Supreme Court is one from the Internet and Mobile Association of India (IAMAI). It followed a challenge from Ahmedabad-based cryptocurrency firm Kali Digital Eco-Systems, which described the guideline as violating people’s constitutional rights “to carry on any occupation, trade or business.”
During the hearing, the petitioners will have the opportunity to present their self-regulatory policies such as anti-money laundering (AML) and Know Your Customer (KYC).
Bitcoin bull Tim Draper calls ban ‘huge mistake'
Condemnation of India’s crypto ban came swiftly, with Bitcoin bull Tim Draper saying the central bank’s hostile stance on digital currency could result in significant income losses for the country.
He said that India’s refusal to accept digital currencies as legal tender was “the stupidest thing” and added:
“If I had a meeting with Modi, I would have let him know he is making a huge mistake.”
Crypto trading to go despite the bank ban
Meanwhile, the volume of digital currency trading in India rose days after the central bank ban. Reports indicated that market players, as well as exchange services, believe local investors were taking advantage of the three-month grace period imposed by the RBI before the new rule is fully enforced.
Shivam Thakral, head of cryptocurrency exchange BuyUcoin, was quoted as saying:
“There is a positive sentiment in the industry that the government will not ban trading in cryptocurrencies, and even if formal banking channels cannot be used, people can move to crypto-crypto trading platforms.”