The Supreme Court on Thursday commenced final arguments on a batch of pleas challenging a Reserve Bank of India circular prohibiting banks and financial institutions from providing services in relation to cryptocurrencies.
Cryptocurrencies are digital currencies, in which encryption techniques are used to regulate the generation of the currency units and verify the transfer of funds, operating independently of a central bank.
A bench of Justices R F Nariman and Surya Kant said that it will take up the matters seeking regulation of cryptocurrency at the later stage and would first deal with the batch of petitions challenging the RBI circular of last year.
According to the April 6 circular of last year, the entities regulated by the RBI are prohibited from “providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to the purchase or sale of virtual currencies”.
The Internet and Mobile Association of India (IMAI) opened the arguments in the case and said that the RBI had banned cryptocurrency on “moral grounds” as no prior studies were conducted to analyse the effect of these virtual currencies on the economy.