Top Court Wants India’s Clarity on Crypto in Two Weeks
An end is not in sight for what would become of the confiscation of India’s first Bitcoin ATM and the subsequent arrest of a Unocoin crypto exchange co-founder on Tuesday Oct. 23. Two days after Unocoin’s Harish BV was arrested, India’s Supreme Court gave the central government two weeks to clarify the legality of cryptocurrencies and their use. The request comes as nine crypto exchanges in the country challenged a Reserve Bank of India’s circular in April that disallowed banking entities from providing services to them.
You know the story so far. From my understanding, main stream media calling crypto assets illegal & comparing our Kiosk with a bank ATM [that needs RBI perm as it is like a bank branch] was the trigger. Now that I am out,will try my best to give clarifications & move on. @Unocoin
— Sathvik Vishwanath (@sathvikv) October 26, 2018
The halting of banking services forced some of the exchanges to close while others sought alternative ways to forge ahead. Unocoin came up with Bitcoin ATMs to continue serving its more than a million customers albeit on a smaller scale. Harish’s arrest caused the exchanges to argue again that there is no official ban on trade or exchange of cryptocurrencies in India against the RBI’s effort to discourage their use by deeming them as not legal.
Finally! The crypto matter came up for hearing in court today & Supreme court has asked Govt. to file an affidavit related to the findings of the crypto committee set up by them. They're supposed to submit this within 2 weeks. Things are getting interesting! #isupportcrypto
— Nischal (WazirX) ️ (@NischalShetty) October 25, 2018
China and Japan cases
Governments in many countries where cryptocurrencies are used today always maintain that they are not legal. The caveat is to supposedly inform intended users of the risks involved in dealing with such currencies without infringing on their right to do so. Another reason why the decision to be made by India in the next two weeks would be crucial is recent developments in Japan and China which tend to ease or favour cryptocurrencies.
The Japanese government this week gave the country’s crypto industry a free hand to operate and self-regulate itself with the hope to ensure a better operation. While Japan’s first-of-its-kind approach could be said to have stemmed from its long-standing friendliness with cryptocurrencies, China too recorded a relieving development for enthusiasts of the evolving technology this week. The Shenzhen Court of International Arbitration ruled in a case that the Chinese law does not forbid owning and transferring Bitcoin and should be protected by law because of its property nature and economic value.
1/ Chinese court confirms Bitcoin protected by law. Shenzhen Court of International Arbitration ruled a case involving cryptos. Inside the verdict: CN law does not forbid owning & transferring bitcoin, which should be protected by law bc its property nature and economic value.
— cnLedger (@cnLedger) October 26, 2018
Globally, a recent IBM report shows that more central banks are willing to build on Bitcoin foundation by hopping on the cryptocurrency wagon if the deistributed ledger technology, as a form of blockchain, would be improved upon. On the market scene, Bitcoin is seeing its longest and lowest volatility since April 2017 according to CoinDesk’s Bitcoin Price Index (BPI). With more than half the crypto market’s total capitalization, the stability the top cryptocurrency is seeing has been compared to the stock market’s at some point.
The Indian government’s opinion in the next two weeks would be shaped based on some of these information. Eventually, the RBI may decide to overturn its directive for banks not to work with crypto exchanges. At worst, it would at least allow exchanges to use alternative means of serving customers based on new given rules. An outright ban on crypto-related activities in India does not seem imminent.