Bitcoin firms to start own transfer services as SC refuses to lift RBI ban
04 July 2018
Crypto currency exchanges in the country are all set to start implementing their own solutions for banking alternatives as the Supreme Court on Tuesday refused to grant a stay on the Reserve Bank of India’s ban on banks and financial institutions from dealing with crypto exchanges.
The Supreme Court on Tuesday refused to stay Reserve Bank of India’s circular that virtually banned banks and financial institutions from providing services to any individual or business dealing in digital currencies from 6 July.
A three-judge bench of the Supreme Court headed by Chief Justice Dipak Misra, however, agreed to hear the petition moved by the Internet and Mobile Association of India on 20 July.
In a circular issued on 5 April, RBI has directed all regulated entities to end business transactions involving virtual currencies by 5 July and wind up all such accounts belonging to individuals and firms dealing in virtual currencies.
Apart from the Internet and Mobile Association of India, four other entities have filed petitions in the Supreme Court and the Delhi High Court against the RBI circular. Besides, there is a public interest litigation filed in the apex court related to the regulation of Bitcoins.
Members of the Internet and Mobile Association of India (IAMAI) include major crypto exchanges in the country such as Unocoin, Zebpay, and Wazirx.
Other than the petition by IAMAI, there are four other petitions which the Supreme Court will hear on 20 July.
The IAMAI had also submitted a representation to the RBI explaining in detail the operation of the blockchain, cryptos and how they function. The RBI has said it will respond to that within 7 days.
Despite hopes of obtaining a stay on RBI ban, major crypto exchanges in the country have been trying to find banking alternatives.
Wazirx is reported to be preparing to launch a P2P crypto transfer service to allow its customers to buy and sell crypto through its escrow service, bypassing the RBI ban.
Crypto exchange Koinex is also preparing to launch its own P2P service called Loop. The exchange has already launched a crypto-to-crypto trading platform, as did Unocoin and Zebpay.
Kevin Helms, a student of Austrian Economics, founded Bitcoin in 2011 and has been working on bitcoin security, open-source systems, network effects and the intersection between economics and cryptography ever since.