Can not unilaterally govern the legality of Bitcoin, the Central Bank of India tells the Supreme Court

The central bank of India is rejecting a court-approved petition seeking regulation-effective legalization-of cryptocurrencies, such as Bitcoin, in the country.

Source

The Reserve Bank of India (RBI), the central bank and financial regulator of the country, responded to a public interest litigation (PIL) filed in the Supreme Court of India in November 2017, which asked the authorities to regulate the cryptocurrency sector, particularly domestic transactions and exchanges.

At that time, the Supreme Court of India, the highest court in the country, admitted the PIL and issued notices to the central bank, the Securities and Exchange Board of India (the country's market regulator) and the Department of Finance, Law and Justice and Information Technology ministries to respond to the request and start the process of regulation of cryptocurrencies.

In response to the 43-page PIL, the central bank has informed the Supreme Court that the issue is a matter of policy for the Indian Parliament and not a matter of debate between the courts.

The central bank submitted its own 15-page response, the Business Line reports , stating that it should not be entrusted with making a decision on the legality of cryptocurrencies, since there are government committees that already have the task of studying the implications of the cryptocurrencies and propose a framework for its use in the country.

More than a year after the formation of the interdisciplinary committee, the authorities are still deliberating on a regulatory course for the sector in the country.

In explaining his reasons for deflecting responsibility, the central bank of India told the Supreme Court:

In the present case, the issue of legalization of virtual currencies (VC), such as bitcoins or others, will have implications for the roles and responsibilities of other regulatory / enforcement agencies. Therefore, the RBI can not decide unilaterally by the government on the legality of the bitcoins.

In its response, the RBI also confirmed that the committee should present a report on cryptocurrencies on June 30 and insisted that the working group study the regulatory approach adopted by other countries before proposing a regulatory framework in India.

Meanwhile, despite mainstream reports indicating otherwise this year, Bitcoin is not banned in India despite recent cuts led by the central bank that effectively banned Indian citizens from buying cryptocurrencies through their bank accounts.