The cryptocurrency exchanges, which saw the threat to their businesses filed a public interest litigation in India’s Supreme Court demanding to introduce the relevant regulations on the market. The Reserve Bank of India avoided the responsibility on the matter by saying that it was the India’s Parliament who had to make the decisions on such matters. As the cryptocurrencies are not recognized as a legal tender, it is difficult to decide whether they come under the responsibility of the institution that is tasked with setting the monetary policy in the country. An online petition that was demanding the reversal of the ban gathered over 44,000 signatures, but in May India’s Supreme Court said that no petitions against the RBI’s ban on cryptocurrencies could be filed. The final hearing on the matter in the Supreme Court has been set for September 11.
With that much enthusiasm and the number of related businesses, it is not surprising that many people have been dissatisfied with RBI’s decision. Even the representatives from the central bank now think that there is an absolute need for regulation of these activities. Shyam Divan, RBI special counsel has commented on the issue saying that it is necessary to regulate the cryptocurrencies in order to prevent the illegal activities. This argument has been made several times and emphasizes that in the absence of the proper regulatory framework, the activities continue to occur beyond the reaches of the law. Cryptocurrencies, which have been labeled by some as a tool for money laundering and terrorist financing, might be at an even more severe risk of this problem.