The Supreme Court of India on Tuesday reserved its order on the case against Reserve Bank of India’s decision to bar banking services from dealing in any transactions associated with cryptocurrency. This means the judge might not immediately deliver a decision but take time to review the evidence and deliver a decision at a later time.
Both sides were directed by the court to submit their written submission on Friday. A bench headed by Justice RF Nariman reserved the order after hearing arguments from all the related parties.
The Internet and Mobile Association of India (IAMAI), a non-profit organization whose members include crypto exchanges, approached the court objecting RBI’s circular from April 2018 that directed regulated entities to not deal with the cryptocurrencies or provide services to any entity or person either.
IAMAI claimed that RBI’s move had effectively banned legitimate business activity in digital currencies. Ashim Sood, IAMAI counsel said that RBI’s action was against its powers as specified by the Banking Regulation Act.
IAMAI also said that the central bank’s directive was based on “moral grounds,” and did not involve any studies conducted by the RBI to understand the effect of virtual currencies on the financial market.
Meanwhile, RBI argued that the ban was to protect entities from “activities that pose reputational and financial risks along with other legal and operational risks.” It further presented the argument regarding the risk of terrorist financing and money laundering through cryptos.