SC to hear final arguments on petitions challenging RBI's ban on cryptocurrency today

The RBI insists that cryptocurrencies cannot be currently considered valid currency.

The Supreme Court on Monday was unable to hear responses to petitions challenging the Reserve Bank of India's (RBI) virtual ban on cryptocurrency exchanges and will instead do so on 27 November.

During its previous hearing in September, the SC was forced to postpone the hearing of responses to petitions from responders, except for the RBI, due to lack of time. The RBI had then reiterated that cryptocurrencies cannot be considered valid currency or money under the existing legal system.

Representational image

Representational image

The issue dates back to April when the RBI began its crackdown on virtual currencies, asking regulated entities to stay away from cryptocurrency traders and firms. This was after the government had reiterated several times that cryptocurrencies were not legal tender.

With cryptocurrencies like Bitcoin and Ethereum gaining exponential momentum in terms of their valuation at the time, Indian investors were beginning to drift towards this "currency." Before things got out of hand, the RBI decided to intervene. Bitcoin exchanges and wallet services were definitely unhappy with all this.

Following the RBI's decision, a number of cryptocurrency exchanges came to the fore challenging the decision in the Delhi High Court, and this was soon escalated to the Supreme Court. Stepping into the matter soon after, the SC issued a notice to the RBI and the central government to respond to the petitions filed.

The RBI meanwhile set a 6 July date for regulated entities to sever all existing ties with individual or business entities dealing with or settling virtual currencies. The SC also refused to grant interim relief to cryptocurrency players, forcing investors to consider a barter system or to tap the black market to continue trading.

To makes things worse for cryptocurrency players awaiting the SC judgement, the RBI and the central government asked for three weeks time for filing responses to petitions in August pushing the hearing dates further to September.

With responses from government entities such as the ministries of finance, law and justice and information technology (IT) left to heard on Tuesday, we could be edging towards closure on whether cryptocurrencies will be regarded as legal tender in the country, or not.

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