The Supreme Court of India has given the Union of India – the country's central government – four weeks to develop regulations and policies for the use of digital currency within the country, according to a February 25 article in the Indian business publication INC42.
India's supreme court has ceased hearing cases related to cryptocurrency in general or the repeal of a circular released by the Reserve Bank of India (RBI) in particular. The RBI circular, issued in April 2018, banned banks from providing financial services to businesses or individuals trading in virtual currency. The ban has prompted exchanges to seek help from the highest court in the country and even forced some exchanges to shut down altogether.
In August 2018, representatives from Kali Digital Ecosystems, which planned to open up an exchange in India, filed a writ petition with the Delhi High Court claiming that RBI's ban was "arbitrary and unconstitutional." In September 2018, Indian exchange Zebpay announced it was stopping operations, saying, "The curb on bank accounts has crippled our, and our customer's [sic], ability to transact business meaningfully."
This is not the first time India's supreme court has given the Indian government a deadline on the issue of cryptocurrency. In October 2018, the court gave the Indian government two weeks to issue an official opinion regarding crypto. This request was made in response to the numerous petitions challenging the RBI's ban.
Although the RBI's stance on trading in crypto is inherently negative, the bank has considered the possibility of issuing a central bank digital currency, although those plans were discarded a few months after the announcement.
For its part, the government of India submitted suggestions for a legal framework for crypto regulations to the country's finance minister in December 2018. Earlier that year, in May 2018, it considered imposing an 18 percent tax on virtual currency transactions, as well as on the fees collected by exchanges and block rewards collected by miners.
If the Union of India fails to meet this four-week deadline, the supreme court says it will make its own judgment regarding crypto regulations in the country.