No sooner did the news of RBI’s ban on virtual currencies being devoid of any formal research or legal consultations had surfaced, than the news of the apex bank of the nation reconsidering the usage of cryptocurrencies broke out. Surprisingly, in a matter of just about a month, the RBI reconsidered its stand on the issue of cryptocurrency and virtual currencies implementation. It goes without saying that something seems rather off about the RBI’s manoeuvre. For a deeper understanding of the matter, let’s take a look on the timeline of how, where and when the chips have fallen.
- The RBI releases a notice on April 6: ‘Prohibition on dealing in virtual currencies’. This notice made it mandatory for banks, e-wallets and payment gateway providers to restrict themselves from making any virtual currency and crypto transactions, whatsoever.
- As a cascading effect of the restriction, banks probed crypto traders and exchanges to cease trading in virtual currencies through their accounts.
- The matter snowballed and culminated in the filing of a case by respective traders and exchanges at the Supreme Court, the hearing of which is dated for July 20.
This case has brought to light how the notice of the RBI had been drafted without proper consultation of stakeholders and a dire paucity of reasonable grounds to restrict cryptocurrency usage, primarily. Additionally, the RBI admitted to not having a separate internal committee monitoring virtual currencies, in reply of an RTI filed by New Delhi-based lawyer Varun Sethi. Although the central bank has reportedly been part of not one but two committees that were conducted under the Finance Ministry for exploring the potential of virtual currencies in India.
However, it confirmed that it did not have any particular committee within the regulator to study virtual currencies.
Another curve in the case of the petition filed by Sethi is to note how the RTI was filed on April 6, that was replied on May 9, but revealed on June 12. Now the question boils down to how much impact has the groundbreaking Blockchain technology and crypto made on the government’s stand on the matter. With the constant developments in the ecosystem and global technology, it seems rather obvious for the government to endorse cryptocurrencies. However, how soon does this happen is actually what we have to wait and watch.