More bitcoin traders are challenging India’s directive for banks to stop financial services to cryptocurrency exchanges in the populous Asian country, with a court hearing of the challenge set for Thursday this week amid complaints that the Reserve Bank of India (RBI) is curtailing “essential” trade services.
On Monday, the Economic Times in India reported that petitioners under the latest effort to have the bank reverse its directive or stay it are of the opinion that they should continue to utilise banking services, as cryptocurrencies are not illegal in the country.
“Banking is an essential service. How can one deny access to an essential service when I am not doing anything illegal? You have not declared Virtual Currencies illegal in the country.”
In April this year, the Indian central bank said finance institutions under its regulation and oversight were no longer allowed to deal in or provide services to traders or investors dealing in virtual currencies. The latest court challenge will be back in court on May 17.
The 11 representatives of various virtual currency-aligned businesses challenging the RBI in the latest writ are disputing the constitutional validity of the decision by the Indian financial services sector regulator to prevent banks from offering services to companies that facilitate cryptocurrency trading.
Banks in India have until July 5 to be compliant with the central bank’s directive, hence the rush by cryptocurrency exchanges and traders to challenge the bank’s decision. On May 24, the Delhi High Court will further hear from two exchanges, Kali Digital Eco-systems and MoneyTrade Coin, which are both challenging the central bank’s move.
Bitcoin traders and other cryptocurrency exchange companies have in the past few months dragged the Indian Apex Bank to court for its decision. Earlier this month, Flintstone Technologies Private Limited which operates the MoneyTrade Coin exchange challenged India’s bitcoin banking ban, following up on the first challenge by digital asset trading platform CoinRecoil in the High Court of Delhi.
CCN reported last week that four other Indian cryptocurrency exchanges had jointly filed a Writ Petition (Civil) no. 373 of 2018 under Article 32 of the Constitution challenging the constitutional validity of the Central Bank’s Circular. These include Coindelta Exchange, Koinex Exchange, Throughbit Exchange and CoinDCX.
Although the ban on Indian banks has had wide effects on cryptocurrency trading in India, virtual currency exchanges and traders in the country have pivoted to crypto-to-crypto trading as they scramble for ways out of glitches occasioned by the RBI directive.
“Even if there was no RBI circular, the crypto to crypto product would have happened. However, because of the circular and the fact that fiats may no longer be in the picture, it definitely did hurry up and encourage the solution sooner,” said Ajeet Khurana, the CEO of Zebpay.