Crypto vs. RBI: India's Banking Bitcoin Battle Shows No Sign of Letting Up

On April 5, India's Central Bank, the Reserve Bank of India made a big move in the ongoing global regulatory push on cryptocurrencies as it decided to no longer provide services to any person or business that deals with cryptocurrencies.

In May 2017, the demand for Bitcoin grew exponentially and abruptly, so much that India's largest exchanges had to put a limit on Bitcoin purchases due to lack of supply.

In June, Zebpay, one of India's leading Bitcoin exchanges established back in 2012, became the seventh most popular app in the finance category on India's Apple app store, even higher than the apps of many national banks.

In October, it was reported that the major Bitcoin exchanges in India were attracting more than 200,000 new users every month.

In the hopes of deterring buyers, India's Ministry of Finance called Bitcoin a ponzi scheme and said it had no intrinsic value, but this was announced only a few days after Bitcoin topped a high of $20,000, and mostly fell on deaf ears.

State Bank of India, Axis Bank, HDFC Bank, ICICI Bank and Yes Bank had all taken strong actions against crypto exchanges, either closing accounts or severely limiting functionality.

"It could lead to an increase of irregular cash trading of cryptocurrencies in India. In addition, the ban could take away potential revenue to the government from crypto exchanges, and instigate a crypto market price drop 'due to the knee jerk reaction in which prices got impacted.'".

As this issue began to climb up the judicial ladder, it was halted when the Supreme Court of India was called upon.

On May 12, the Supreme Court declined to grant an interim injunction against the RBI. Later on, the Supreme Court came forward again and said that no petitions could be filed in any High Court of India against the RBI crypto decision.

The next step in India's battle for cryptocurrency legitimacy will come on July 20, when the courts sit down and look over the new petitions, but until then, the cryptocummunity has to try to survive even with the banking squeeze.