Can’t Unilaterally Rule on Bitcoin Legality, India’s Central Bank Tells Supreme Court

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India’s central bank is pushing back against a court-approved petition seeking regulation – effectively legalization – of cryptocurrencies like bitcoin in the country.

The Reserve Bank of India (RBI), the country’s central bank and financial regulator, has responded to a public interest litigation (PIL) filed in India’s Supreme Court in November 2017 that called on authorities to regulate the cryptocurrency sector, particularly trading and exchanges, domestically.

At the time, India’s Supreme Court – the highest court in the land – admitted the PIL and issued notices to the central bank, the Securities and Exchange Board of India (the country’s markets regulator) and the Finance, Law & Justice, and Information Technology ministries to respond to the petition and set to task the process of regulating cryptocurrencies.

In response to the 43-page PIL [PDF], the central bank has now told the Supreme Court that the subject is a policy matter for India’s Parliament rather than a subject of debate among the courts.

The central bank filed a 15-page response of its own, the Business Line reports, stating it shouldn’t be tasked to take a decision on the legality of cryptocurrencies since there are government committees already tasked to study the implications of cryptocurrencies and propose a framework for their usage in the country.

More than a year after the formation of the inter-disciplinary committee, authorities are still deliberating over a regulatory course for the sector in the country.

Explaining its reasons to deflect responsibility, India’s central bank told the Supreme court:

In the instant case, the issue of legalising virtual currencies (VCs) like bitcoins or otherwise will have implications on the roles and responsibilities of other regulatory/ enforcement agencies. Therefore, the RBI cannot unilaterally decide for the government on the legality of bitcoins

In its response, the RBI also confirmed that the committee is due to submit a report on cryptocurrencies come June 30 and insisted that the working group will study the regulatory approach taken by other countries before proposing a regulatory framework in India.

Meanwhile, despite mainstream reports to the contrary this year, bitcoin isn’t banned in India despite recent curbs led by the central bank which effectively barred Indian citizens from purchasing cryptocurrency through their bank accounts.

Featured image from Shutterstock.

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May 15, 2018 at 08:30AM

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