The Supreme Court of India has upheld a banking ban on cryptocurrency, after reviewing a petition from the Internet and Mobile Association of India to grant a temporary one-month stay. The ban, issued by the Reserve Bank of India, will go into effect on 5 July 2018. At that point, it will be illegal for all Indian financial institutions to facilitate cryptocurrency activity.
While this is not a total cryptocurrency ban, it will effectively halt almost all fiat to crypto trading, which will be detrimental to cryptocurrency exchanges in India and make it difficult for people to convert fiat to cryptocurrency. This may provide a major boost for Bitcoin dealers, who are likely to become the best method for converting fiat to Bitcoin and vice versa.
Additionally, cryptocurrency exchanges based in India can stay in business if they abandon their fiat trading pairs and become solely crypto to crypto, which is what some Chinese exchanges did following China’s cryptocurrency ban in September 2017. Another thing most major Chinese exchanges did was to leave the country, and the same could happen in India if this ban ends up being permanent.
The Supreme Court will hear another petition from the cryptocurrency industry to halt the Reserve Bank of India’s ban on 20 July, but the precedent has now been set with the Supreme Court’s current decision, making it unlikely future petitions to the Supreme Court will help.
There is some hope that the situation will change when India’s government sets official cryptocurrency regulations, which are being rushed through according to Subash Chandra Garg, the Secretary of the Department of Economic Affairs. However, there is no guarantee that these regulations will reverse the Reserve Bank of India’s ban; in fact, they could possibly reaffirm the ban.
Garg said, “We’ve actually moved quite a lot in that, what part of the crypto business should be banned, what should be preserved and what not. That kind of detailed work has happened. Now we should be in a position to wrap this up in the first fortnight of July.”
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