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Bloomberg
India’s top court refused to overturn a central bank ban on lenders from dealing in cryptocurrencies, a move that effectively outlaws the nascent industry in Asia’s third-largest economy.
A bench headed, by Chief Justice Dipak Misra, said the Reserve Bank of India’s directive prohibiting banks, financial institutions and other regulated institutions from providing any services related to virtual currencies will remain implemented.
In a circular dated April 6 and effective since then, the regulator gave banks three months to exit operations.
India is going a step further than most countries in cracking down on peer-to-peer money. While the central bank — the nation’s main financial regulator — is defending its turf for managing electronic money and also trying to cut off an avenue for crimes using digital coins, many nations such as South Korea are creating rules to allow secure crypto trading.
In the legal challenge before India’s Supreme Court, the central bank told the top court that Bitcoins cannot be treated as currency under India’s existing law that mandates coins to be made of metal or exist in physical form and stamped by the government. The court directed RBI to consider representations by cryptocurrency platform providers.
In India, the finance ministry has yet to make a final ruling on a formal ban.