India’s Supreme Court refused to issue a stay of the April 5 central bank circular that directed the country’s financial institutions to end all cryptocurrency-related banking relationships by July 5. The high court did confirm, however, that it will entertain a petition from the Internet and Mobile Association of India later this month, according to a report from Bloomberg.
The circular in question was issued by the Reserve Bank of India nearly three months ago and directed the nation’s banks and other financial institutions to end all activities related to digital currencies. The order would effectively bar financial firms from providing banking services to cryptocurrency exchanges.
RBI argued to the court that digital currencies don’t qualify as currencies under Indian law, according to the Bloomberg article:
“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.”
As Bloomberg notes in its report, India’s central bank has chosen to be far more aggressive in its approach to digital currencies than many other nations around the world. In some of those countries, policy makers are actively working to encourage growth and innovation in the industry by adopting a more welcoming approach to regulation.
Meanwhile, the European Parliament’s recently-concluded study of digital currencies argued against any ban on the technology in EU countries. Instead, the commissioned report suggested that the EU should work to “harmonize such regulations across jurisdictions.”