Cryptocurrency exchanges in India are reportedly considering approaching Supreme Court to sort out problems they’ve had with central banks currently. Most of the crypto exchanges in the nation have had to stop taking rupee deposits in India, as banks withdrew their services after an informal notice from India’s central bank – the Reserve Bank of India – previously this month.
As per a report, the exchanges are now thinking to approach the Supreme Court to find a solution. Their main complaint is that though informal, the RBI’s regulation ignores the Supreme Court’s judgement from last year. The apex bank had cancelled a ban imposed on financial entities in India by the central bank, that stopped other RBI regulated entities and banks from working with crypto companies.
While banks halted providing services to crypto companies from around May 18, the exchanges could still pull through for a while using other payment processing firms and Paytm. This enabled investors to deposit money to Paytm and transfer it to their exchange accounts. However, last week, the IPO-bound payments app also stopped working with crypto exchanges, leaving them in the stagger.
But including banking partners is simpler said than done. At the moment, with the lack of any strong directive for digital currency in India, approaching court may be the only possible solution to these exchanges. However, that could still be a difficult battle.
For example, banks have the right to withdraw services from anyone whom they consider unreliable. Essentially, while the RBI regulation may not be an official diktat, a bank can always say that the market appears to be unsteady for it to lend to. On the other hand, the crypto exchanges will have to disagree and prove that such thinking is discriminatory and groundless towards them.