Cryptocurrency exchanges may approach SC on RBI directive
New Delhi: Cryptocurrency exchanges may move the Supreme Court to seek direction on whether the Reserve Bank of India (RBI) can direct banks to stop dealing with them, ET reported. This comes after an ‘informal’ diktat from RBI, in which it asked banks to stop dealing with crypto exchanges.
In the last month or so, some of the banks have stopped providing services to the exchanges, which has led to a major disruption.
Banks have recently become cautious about cryptocurrency-related transactions amid regulatory uncertainty.
Earlier this month, exchanges have communicated to the government that market regulator Securities and Exchange Board of India (Sebi) is more suited to regulate the space than the Reserve Bank of India (RBI).
Exchanges reasoned that cryptocurrency assets, such as Bitcoin and Ethereum, are closer to commodities than currencies, Economic Times reported. The exchanges also proposed a new entity to regulate cryptocurrencies.
In this regard, these exchanges are now coming together to seek clarity around the payment choke.
“Even after last year’s Supreme Court verdict where it quashed the RBI order to ban crypto transactions, the banks are not lending their services to crypto exchanges and crypto traders,” said Ashish Mehta, co-founder DigitX, a cryptocurrency exchange told financial daily Economic Times. “Keeping this issue in mind and the impact on business activity, most of the major crypto exchanges are looking to knock the door of the Supreme Court again to get a clear-cut directive regarding banking services so that uninterrupted transaction services can be provided to the traders/investors.”
However, in 2020, the top court quashed RBI’s circular, paving way for cryptocurrency exchanges to restart their operations. Most banks queued up to offer services to cryptocurrency exchanges after the Supreme Court order. Until a recent directive where the Reserve bank of India again asked the banks to stop doing so.
According to the ET report, the exchanges could file a petition in this regard anytime this week or next week.
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