The Reserve Bank of India (RBI) on April 6, 2018 issued a circular that clamped down on the burgeoning cryptocurrency trade and exchange in India by directing banks and NBFC’s (Non-Banking Financial Company) against having links with firms or individuals dealing with or settling in cryptocurrencies. Cryptocurrency adopters, exchanges and advocacy groups have since opposed this move and challenged the constitutional validity of the same through writ petitions.
Companies have moved various High Courts filing petitions against the RBI. Ahmedabad-based Kali Digital, an exchange operator and London-based Flinstone Tech, a crypto trading and storage platform moved Delhi High Court against the decision along with four more digital currency exchanges Koinex, Coindelta, ThroughBit and CoinDCX.
Those against the regulations have deemed the RBI policy to be “arbitrary, unfair and unconstitutional” while alleging that it violates Articles 19 (1) (g) and Article 14 of the Constitution of India. While, Article 19(1) (g) of the Indian Constitution gives citizens the right to carry on any occupation, trade or business, Article 14 prohibits discrimination among equals. Additionally, the move has said to be in violation of Article 301 of the Constitution which guarantees freedom of trade and commerce throughout the country.
This directive from the RBI comes at a time when a nationwide survey conducted in January had revealed that in the last 17 months, Indians have invested in cryptocurrencies worth a whopping USD 3.5 billion. Not surprisingly, this mandate has led to a growing number of cryptocurrency-related petitions being filed against the RBI.
The Supreme Court of India is slated to hold a hearing to this effect on July 20 (tentative) to decide on the petitions that challenging the RBI policy. The Supreme Court docket has barred all other courts from accepting petitions on the subject in the meantime.
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