Existing India’s Legal System Can’t Distinguish Virtual Currencies, RBI’s Sworn Statement to Supreme CourtSeptember 14, 2018
On September 11, Wednesday, RBI or Reserve Bank of India filed an official declaration in the Supreme Court to explain its position on digital currencies.
RBI reserved its viewpoints on the legitimacy of BTC and other digital assets in India, telling that the bill hasn’t defined any legal systems for cryptocurrencies. Citing the condition of The RBI Act and The Coinage Act, the sworn statement explained that the currently authorized structures neither distinguish BTC as money nor currency. Hence, they aren’t a legal mode of payment.
At present, India’s Supreme Court is conducting a hearing between the BTC exchanges and RBI. The hectic schedule of the court has pushed the schedule of the hearing two times already. September 27 is the scheduled of the next trial.
Reserve Bank of India has been facing criticism from the crypto-community from the time it mandated banking institutions to end their services with digital currency exchanges. On the other hand, RBI stated that they couldn’t be the one to distinguish BTC as illegal or legal. Constitutional stipulations restrict RBI- the acts stated in India’s Constitution- which makes them take the necessary measures against the flourishing industry of cryptocurrency. RBI can’t unilaterally make a decision for the Government regarding Bitcoins legality,” this is according to central bank head.
The sworn statement filed by the RBI also mentioned the FEMA or Foreign Exchange Management Act that allows them the control to name instrument as legal currency. However, the act is just suitable for elements with the same feature which of postal orders, money orders, cheques, and many others.
RBI added that BTC couldn’t fall under the group of foreign currency as sovereign states don’t issue them. What is more, the lack of any official description of these virtual assets puts it far from the purview of PSSA or Payment and Settlement System Act.
In its past statements, RBI has backed digital currency rules in India. However, it requires a firm description to start the process of regulatory. At present, BTC is indefinable because of extensive features. It can be utilized as a commodity, stock, and money. Much false news has hinted that regulators in India would call BTC as commodity class asset.
Regardless of the description, the influence of making rigid support will fall either upon SEBI or Securities and Exchange Board of India or RBI. SEBI has already planned tours to the UK, Japan, and the UK to know more digital currency.