The Reserve Bank of India has stated in the Supreme Court that crypto currency is not real currency. He does not consider virtual currencies like Bitcoin as currency nor is there a law that qualifies a bank to consider Bitcoin as a currency. The bank clarified that the transactions, payments, settlement etc. made under these currencies cannot be protected by law.
Bank gave affidavit
In the latest affidavit filed in the Supreme Court, the Assistant General Manager of the Reserve Bank said that virtual currencies are not in solid state nor are they issued by a bank, so no law applies to them. The currency regulator said that under FEMA (Foreign Exchange Management Act), the Reserve Bank has the authority to notify something as a valid currency. But the law requires that such instruments should have properties like checks, postal orders, money orders etc. Therefore, bitcoin cannot be declared a currency under FEMA in such a situation.
Is not in the definition of currency
Bitcoin and other virtual currencies are not even in solid state nor can they be converted into Indian rupees. Therefore the definition of Indian currency on bitcoin cannot be extended. At the same time, these currencies are not issued by any bank or sovereign nation, so they cannot be considered as foreign currency. Therefore, there is no question of considering these currencies as legal and illegal.
Requesting to dismiss all petitions, the bank said that users, depositors and businessmen have been warned of its dangers. The Reserve Bank asked the Supreme Court to dismiss all petitions, as these are matters of economic policy in which the government and the Reserve Bank have the legal right to take decisions. Petitioners’ own viewpoints cannot be the basis for challenging policy matters. The next hearing of the case will be held on 17 September.
The bank has given this reply in response to a number of petitions urging the court to stop the crypto currency business in the country as it could lead to flow of money for anti-social activities. At the same time, there are some petitions in which the Reserve Bank’s notification of April 6 has been challenged. In this notification, the Reserve Bank banned the financial institutions under its control from offering services in crypto currency. These petitions are also filed in many high courts of the country.