In a hearing in response to a writ petition by the IAMAI today, the Supreme Court did not grant a temporary stay on the RBI circular that was released on April 6th. The circular mandated that all banks must exit relationships with individuals or entities that deal with cryptocurrencies by the 5th of July.
Mumbai company Kali Digital had filed a petition in the HIgh Court against the RBI calling the move “unconstitutional”. The petition was then backed by several other Indian crypto-companies. With the July 5th date approaching, the Internet and Mobile Association of India had filed a writ petition asking the Supreme Court to grant a temporary stay order until the July 20th hearing. The case was heard today in the Supreme Court, where they did not grant a temporary stay.
However, it is important to note that this does not translate to blanket ban on cryptocurrencies in India. The Secretary of Economic Affairs at the Ministry of Finance, Subhash Chandra Garg is quoted saying that,
“We are fairly close to developing a template (for the use of cryptocurrencies) that might be in the best interests of our country. We have moved pretty far in this regard, and we have prepared a draft that entails what parts of this businesses should be banned and what should be preserved. This should be discussed by the first week of July and we should wrap this up within in the first fortnight of July.”
The refusal to grant a temporary stay could mean that the Indian government is simply taking the time to draft a comprehensive document of legal framework for cryptocurrency companies to operate within.
This means that the RBI circular will still come into effect on July 5th, and also that the next hearing in the matter will still take place on July 20th. The news is yet to have an effect on the prices of cryptocurrencies in Indian exchanges. The crypto market bounced back today after a miserable week, and continues to stay in the green as of now.