28.03.2024

Reserve Bank of India to Appeal Supreme Court’s Crypto Decision

According to a report by The Economic Times on March 6, the RBI is worried that the court’s decision could lead to cryptocurrency trading and put the banking system at risk.

The Reserve Bank of India (RBI) is planning to file a petition against the recent landmark judgment made by the Supreme Court that nullified the controversial banking ban it imposed on companies transacting in cryptocurrencies.

As Cointelegraph reported, on March 4 the Supreme Court nullified the RBI’s blanket ban on banks dealing with crypto businesses. The central bank had initially enforced the ban in July 2018.

Challenging the Supreme Court’s decision

This led to petitions from industry players and public alike, until the challenge was brought to the Supreme Court by the Internet Mobile Association of India (IAMAI), a not for profit industry body representing internet consumers and investors.

The Supreme Court’s decision to overturn the ban followed two weeks of hearings in January this year. The RBI will now seek a review of this ruling.

No proof that the banking system is at risk

The RBI’s concern that this may result in cryptocurrency trading may already be moot, as many Indian cryptocurrency exchanges already resumed fiat deposits and withdrawals within 24 hours of the ban being lifted.

However, the court ruling stated that RBI had not conclusively shown that cryptocurrency trading was damaging. Unless it can do so, the Supreme Court is unlikely to alter its decision, despite the central bank’s protests.

The central bank may also face another issue, as many companies were forced to cease trading after the ban and may seek compensation. As Abhishek Rastogi, a lawyer representing one of the cryptocurrency platforms explained:

“The Supreme Court may look at the RBI’s review petition but as of now the cryptocurrency platforms can operate in India. Many companies have even gone bankrupt after the RBI’s diktat and they may also look to initiate action in this regard.”

SEC Chair Clayton: Bitcoin Needs ‘Better Regulation’ Before Major Exchange Listing

Better regulation is needed around bitcoin markets before they can be traded on major exchanges, the head of the U.S. Securities and Exchange Commission said on Thursday.

Speaking at CNBC’s Delivering Alpha conference, SEC Chairman Jay Clayton said investors are “sorely mistaken” if they think bitcoin and other cryptocurrencies undergo the same price discovery practices as products on top exchanges like the Nasdaq or New York Stock Exchange.

“We have to get to a place, in my view – just speaking for myself – we have to get to a place that we can be confident that trading is better regulated.”

Clayton said price reports do not indicate thorough price discovery, as he claims major exchanges perform for other financial products. Investor protections built into major exchanges, he continued, are needed in crypto markets before they can be added.

Clayton’s crypto message follows remarks made earlier this month concerning a bitcoin exchange-traded fund (ETF). Clayton claimed there is “work left to be done”, although “progress is being made.”

The financial regulator is nearing deadlines for approving or rejecting bitcoin ETFs from Wilshire Pheonix and Bitwise Asset Management.

A third bitcoin ETF applications, Cboe BZX Exchange VanEck/SolidX bitcoin ETC, was withdrawn earlier this week as an October 18 deadline loomed and approval seemed unlikely.

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