Money & Banking

Cannot unilaterally decide on cryptos: RBI to apex court

Priyanka Pani Mumbai | Updated on May 14, 2018 Published on May 14, 2018

Close watch There are already some committees in place that are studying the implications cryptocurrencies will have on the economy   -  REUTERS

The Reserve Bank of India has told the Supreme Court that it should not hear public interest litigation on the issue of legality of bitcoins as it was a policy matter. RBI said this in connection with a 2017 public interest litigation seeking regulation of virtual currencies (VCs).

The case relates to a 43-page PIL filed by advocate Dwaipayan Bhowmick in November 2017 that sought directions to control the flow of bitcoins in India, its legality and ways to regulate VCs such as bitcoins, XRP and ethereum, among a hundred others.

The banking regulator, in a 15-page response, said that the correct forum to test the correctness of a policy is the Parliament and not the Courts.

In a reply filed with the Supreme Court, the RBI has also said that the central bank alone cannot take any decision on the legality or illegality of virtual currencies since there are already some committees that are studying the implications that cryptos will have on the economy and its characteristics.

“In the instant case, the issue of legalising virtual currencies (VCs) like bitcoins or otherwise will have implications on the roles and responsibilities of other regulatory/ enforcement agencies. Therefore, the RBI cannot unilaterally decide for the government on the legality of bitcoins,” it said in its reply filed with the apex court. BusinessLine has a copy of the response that the RBI has filed.

The apex bank, which also submitted before the court various press releases it had issued as cautionary advisory for people engaged in the trading of VCs, said that the Ministry of Finance has constituted an inter-disciplinary committee to examine the current status of VCs in India and submit a report by June 30. The committee will also study the approach taken by countries globally and then suggest a framework for the regulation in India.

Meanwhile, hit by the recent regulations barring banks from supporting any bitcoin-related transactions, Indian cryptocurrency exchanges have decided to pursue legal options. As many as six exchanges have taken legal recourse to challenge a Reserve Bank of India (RBI) order issued on April 6.

According to the Supreme Court website, four exchanges – Coindelta, Koinex, Throughbit Exchange and CoinDCX – have filed a joint writ petition against the RBI circular. Two other exchanges – CoinRecoil and MoneyTradeCoin – have filed separate cases in the Delhi High Court against the RBI and the Centre.

Published on May 14, 2018
This article is closed for comments.
Please Email the Editor