The Supreme Court (SC) of India refused to grant an interim stay on the RBI’s circular dated April 6, which came into effect today (July 5). Taking a cognisance of this, major cryptocurrency exchanges in the country have stopped their rupee-to-crypto exchange feature and vice versa trading facilities.
After-Effects Of The RBI Circular
Cryptocurrency exchange Zebpay, in a notification sent to its users yesterday (July 4), stated that it has disabled the rupee deposit and withdrawal options on the Zebpay app. “This is being done in light of the bank account closures as per the RBI guideline,” it said.
While Zebpay and another exchange, WazirX, are already offering crypto-to-crypto trading, another leading exchange, Unocoin, today (July 5) launched crypto-to-crypto trading.
Commenting on how the RBI’s move will affect the Indian cryptocurrency industry, Sathvik Vishwanath, co-founder and CEO, Unocoin Technologies, told Inc42, “The majority of trade when it comes to cryptocurrency in India is buying or selling through INR. So this will significantly affect the trading volumes till the next steps are figured out. From what it looks like, short-term traders have opted to cash out while the long-term ones are holding the cryptocurrencies and waiting for regulations to be put in place.”
While Unocoin is also working on alternatives for cash-in and cash-out, what are the legal arguments that can be put forward by the cryptocurrency entities during the next hearing on July 20? While the Supreme Court on July 3 asked the RBI to clarify its stand on the matter further, can the exchanges really hold their ground against the RBI?
Speaking to Inc42, Prashant Phillips, partner, Lakshmikumaran & Sridharan law firm, explained the intricacies involved, “It appears that the Supreme Court shares the concerns and apprehensions of the RBI in relation to the use of cryptocurrencies. The price at which virtual currencies are transacted has been purely speculative, which, in the absence of any regulations or guidelines, exposes investors and the general public to huge financial risks.”