Cryptocurrency trade braces for RBI ban

Zebpay warns customers it may not be able to honour withdrawal requests

July 05, 2018 09:34 pm | Updated 09:39 pm IST - NEW DELHI

Dead end:  The action is a big blow to not only cryptocurrency trading platforms, but also individuals.

Dead end: The action is a big blow to not only cryptocurrency trading platforms, but also individuals.

The Supreme Court on Tuesday refused to stay the RBI’s directive to banks instructing them to stop all business with entities dealing in cryptocurrencies, which means the ban would come into effect from July 6, as originally planned.

The RBI’s directive and the Supreme Court’s judgment have elicited mixed reactions from industry players and analysts, with some saying this would be a big blow to the industry, while others see some hope in the form of a consolidated cryptocurrency policy.

“The RBI restriction will kick in from July 6, 2018 as envisaged in the circular,” Rashmi Deshpande, Associate Partner, Khaitan & Co. said. “This [the Supreme Court action] is a big blow to not only cryptocurrency trading platforms, but also individuals holding cryptocurrency. The choking of banking channels means that virtually all cryptocurrency related transactions will have to be done in cash or not at all.” In light of the Supreme Court’s action, cryptocurrency exchange Zebpay began warning its customers about an eventuality where it might not be able to honour rupee withdrawal requests.

‘Beyond control’

“While our industry is challenging this legally, the outcome is beyond our control,” the exchange said in a notice. “Hence, if you are holding any rupees, or depositing any rupees in Zebpay, there could soon come a time when we may be not be able to honour withdrawal requests. Please continue only if you understand this risk.”

Some cryptocurrency operators are, however, more optimistic about the situation, citing Economic Affairs Secretary Subhash Garg’s comments about a regulatory framework being set up for the Indian market.

“This is far from the end of crypto markets in India,” said Sandeep Phogat, founder and CEO, Panaesha Capital. “The Economic Affairs Secretary is already quoted saying that a regulatory framework is being built in relation to the cryptocurrency market in India. This framework would not have been in the process of development if the government had the intention to ban cryptocurrencies entirely.”

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.