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Supreme Court to hear all cases against RBI’s order on virtual currencies

The Supreme Court has decided to hear all matters relating to the RBI’s directive that prevents banking entities from dealing with virtual currencies. The Economic Times reported that the apex court has directed the transfer of pending petitions which include, two in Delhi High Court and one in Calcutta High Court. The next date for the hearing is set for July 20. High courts will no longer entertain any more petition relating to the matter. A total of five writ petitions including two in Supreme court have been filed challenging the central bank’s circular.

In the meantime, the Supreme Court has said that the petitioners can make representations to the RBI regarding the circular within two weeks. According to the ET report, it will be an opportunity for exchanges to showcase self-regulatory policies such as Know Your Customer (KYC) and Anti-money Laundering (AML) to central bank officials.

Earlier this week, the Internet and Mobile Association of India (IAMAI) had filed a writ petition in the Supreme Court to put a stay on the central bank’s order. This was the fifth such petition filed against the RBI on its order.

Also Read: The RBI’s virtual ban on crypto-currencies is illogical – Guest Column

Another writ petition was filed by a group of 11 different representatives from various crypto-related businesses challenging the constitutional validity of the RBI’s decision recently. Separately, two petitions are also set to be heard by the Delhi High Court, filed by cryptocurrency exchanges Kali Digital Eco-systems and Moneytradecoin, opposing the RBI rule. Last week, another joint writ petition was filed by four cryptocurrency exchanges in the apex court against the RBI.

RBI’s cryptocurrency ban

Back in April, the RBI had directed all regulated entities including banks not to provide services to businesses dealing in virtual currencies (cryptocurrencies) like bitcoins. While the RBI had stopped short of banning cryptocurrencies entirely, this move severely restricts consumers’ ability to either purchase or sell cryptocurrencies like Bitcoins.

According to the Central bank, the decision came into effect immediately. Regulated entities which already are dealing with virtual currency shall exit the relationship within a specified time. RBI had said that it will issue detailed guidelines in a separate circular soon.

In a statement on various regulatory policies, the RBI had conceded that “technological innovations, including those underlying virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system.” It goes on to say that cryptocurrencies “raise concerns of consumer protection, market integrity and money laundering, among others.”

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