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Crypto Currencies Encourage Illegal Dealings: RBI Tells SC

Pointing out that transaction with crypto currency could “encourage illegal transactions” in the country, the RBI has told the Supreme Court that a committee has been set up by the Centre to go into its eventual validity.

“We have already issued a circular prohibiting use of these virtual currencies”, senior advocate Shyam Divan who appeared for the RBI told a bench of chief justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud on Friday.

Hearing was on PILs filed by an advocate Dwaipayan Bhowmick and a law student Siddharth Dalmia which sought setting up of a panel to frame a mechanism to regulate the flow of Bitcoin.

RBI wanted to file a detailed affidavit .The federal bank and the central government meanwhile also sought three weeks time from the bench, which also comprised justices A M Khanwilkar and D Y Chandrachud, for filing their responses to a clutch of petitions on the issue.

Some petitions challenged the use of virtual currencies and alleged that they posed grave dangers to the traditional economy. and they also sought framing of guidelines to regulate them.

SC on May 17 had transferred to itself the petitions pending in various high courts on virtual currencies and barred them from entertaining any plea in future relating to an RBI circular prohibiting dealings in such currencies.

On November 16 last year Supreme Court had sought the response of the Centre on the petition seeking regulation of the flow of Bitcoin (Crypto Currency) and wanted that the virtual currency be made accountable to the exchequer.
Notices went to ministries of Finance, Law and Justice, Information Technology, market regulator SEBI and the RBI.

Bitcoin is a digital currency that allows people to buy goods and services and exchange money without involving banks, credit card issuers or other third parties.

“It is submitted that money used to buy Bitcoin (crypto money) from foreign locations is completely untraceable and may be used for trading and various other financial activities directly from crypto currency accounts without any accountability. It is pertinent to mention herein that such trades affect the market value of other commodities inevitably”, said the plea.

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  • Elijah Fernandes says:

    Bitcoins are the common mans answer to stashing money in offshore banks (swiss,) accounts, it does not require a third party, and like Swiss Bank is safe from Indian gov control, in the near future instead of voting we will all use Bitcoins/ Bitshares/crypto currency to vote on issues instead of voting for useless party politics. .. .. Bitcoin is an idea whose time has come. …. The future is decentralized.

  • Rajesh Chhabra says:

    Bitcoin should be legal. Crypto is future

  • Payal Dhupat ( Advocate ) says:

    This illegal business makes many people rich and small investors started cheating with the innocent people of India. Law needed..

  • Sammed Pandharkar says:

    In that logic , The rupee also ‘encourages’ illeagal dealings, coz currently whatever ‘dealings’ happen, they happen in rupees. The problem is not crypto currency but it’s RBI’s inability to come up with countermeasures for illeagal activities, and they are just outright banning the crypto market paranoid that it’ll replace RBI’s rupee.

  • Ram says:

    Bitcoin is the future currency. It is the decentralised database. You can have it such databases in Delhi/Mumbai in India too but it is through world. Crypto currency, Nobody can hack. No theft. Its like tampered proof. Most Trusted and more secure. No printing is required for the government. The security will ask you your KYC/GDPR for initial registry for any mobile or IP. It is the future technology to secure humans wealth and health. But it may take some time to understand for our government and people. Kudos it will helpful to like for us country the most. The technology also called Block chain. The AP government is already aligning to secure the land documents by using block chain.The technology also called the electronic ledger.

  • Ravi says:

    The bitcoin is nothing but under lying technology of blockchain which is is on the rapid usage by all the industries software banking technologies its a product of maths the crypto graphy which is based on algorithms a detailed analysis has been given by andreas antenepolus eminent researcher every one has to listen his lectures on you tube it makes a good sense of knowledge

  • Ashok setty says:

    I like very much current information

  • Rangamannar says:

    Framing guideline to regulate crypto-digital currency is a must, to avoid illegal transaction n revenue losses to system.

  • Muneer Makhdoomi says:

    I support crypto because many people invested their money and gained.Many poor people also invested their hardly earned money in crypto but they are in loss because of RBI’s Circular which pushed rate very low.
    I think SC should regulate it with some rules and regulations so that people can earn and crypto can solve their financial position to some extend because there is very much unemployement in india.