Does India Plan to Reverse its Crypto Trade Ban?

In a much-awaited event, the Supreme Court of India was supposed to hear the state of cryptocurrencies in the country on July 20. But, the wait is not over yet. This hearing has been postponed to September 11.

According to Crypto Kanoon, a local legal platform based in India, “Supreme Court listed the matter for final disposal on 11th September. All (remaining) parties to file their reply within four weeks.”

Crypto enthusiasts of the country were eagerly waiting for the judgment after the Reserve Bank of India (RBI) had suspended all the crypto-related dealings with banks. It seems that they would have to wait a bit longer till the final decision arrives.

Crypto Ban in India

The RBI announced back in April that all the commercial banks are being directed to avoid all cryptocurrency related businesses. This ban came into effect on July 5 and suspended all the fiat crypto-to-crypto trading.

According to Crypto Kanoon, “Limited arguments were advanced on behalf of IAMAI and RBI today. Since SEBI (Securities and Exchange Board of India) and few others have not filed their response to the Petition seeking regulation, so the Court directed for completion of pleadings.”

Gopal Subramaniam, a representative of IAMAI (Internet and Mobile Association of India), stated in court:

“In the world of digitalisation, such a Circular from RBI would be a loss,” with RBI being India’s central bank. While SEBI is India’s SEC (Security and Exchange Commission). They apparently had failed to respond, leading in part to this adjournment.”

All Eyes on 11 September Now

While the Indian government is still looking into the matter and yet to come with a final decision, it is expected that India might reverse its crypto-trade ban, after an unnamed senior government official hinted a positive response by stating: “Trade is not a criminal offence. Most of us trade in various asset classes in the stock market. So how is this (cryptocurrency trading) any different?”

However, the hearing has been postponed as other parties along with SEBI had not filed their responses yet. Meanwhile, major crypto exchanges like Coindelta, Localbitcoin, and Koinex have started supporting peer-to-peer support. Some of the bigger names like Zebpay, BuyUcoin, and Coinone have already removed all fiat withdrawals and deposits.

It is expected that the petition is to be heard by prominent attorneys of the Indian Judiciary system including Chief Justice DY Chandrachud, Dipak Misra, and AM Khanwilkar.

Brief History of Cryptocurrencies in India

As a matter of fact, India has not been quite supportive when it comes to keeping its viewpoint on crypto. It was in December 2013 that the RBI first issued an announcement to potential crypto users warning them about the risks involved.

Since then, RBI has been quite vocal against the use of crypto. The last notice was issued by the bank in 2017 when the crypto’s was popularity was on the rise.

However, all these warnings and notices failed to create much impact on the legal status of the cryptocurrencies.

In an interview with the leading daily of the country, Economic Times, in October 2017, Chief Economist, Dr. S.P. Sharma said, “neither has the government formally brought Bitcoin under the definition of currency nor has it made it illegal.”

Further, cryptocurrencies gained extreme momentum in December 2017, majorly due to the mind-blowing performance of Bitcoin as it was trading for $20,000 at that time. The government interfered again, and India’s Income Tax department came into the picture.

As per a report by Business Standard, the watchdog visited nine major cryptocurrency exchanges in Kochi, Hyderabad, Delhi, Mumbai, and Bengaluru on December 13 last year and enquired about the tax evasion. Not only this, the agency even sent tax notices to a lot of investors based on their transaction history, precisely 400,000 to 500,000 investors.

A Ray of Hope

Nevertheless, India is home to a large number of cryptocurrency enthusiasts, and it would be interesting to see what the government comes up with on the next hearing. While cryptonians seem to expect positive, we would still have to wait for the result.