On July 20, 2018, there were allegations made by The Reserve Bank of India that digital trading currencies would lead to doing transactions that are not legal. They told the same to the Supreme Court following which a circular was issued which said that trading and using cryptocurrency is prohibited.
To quote their words, they explained that cryptocurrencies are “a stateless digital currency.” Encryption was used to trade such currencies, and they worked independently and had no specific centralized body, this would mean that no government body could interfere when a transaction is carried out. Shyam Divan who is a senior advocate and was appearing on behalf of RBI informed to the bench that was led by Chief Justice Dipak Misra that there was a committee that had been formed that would handle issues about cryptocurrencies. The advocate said that the Centre formed the committee and appealed to the Supreme Court that the matter should be looked into at the earliest and a final decision should be made.
A three week was taken from the bench by the central government as well as the federal bank. Apart from Dipak Misra, the bend consisted of A M Khanwilkar and D Y Chandrachud as justices. They were included so that their responses would also be filed to a clutch of petitions regarding this problem.
The proposed time was granted by the bench so that they will get time to file the responses following which a petition was confirmed that final hearing would take place on September 11.
Few petitions questioned the use of cryptocurrency and claimed that they would cause great danger to the conventional economy. They even tried to obtain a framework for guidelines so that they could be regulated.
Apart from this, they tried to obtain a way to the Center so that they could take emergency steps to refrain from selling and buying of cryptocurrencies illegally.
The circular issued by RBI on April 6 on “Prohibition on dealing in Virtual Currencies” has been questioned by some petitions.
On May 17th the petitions that were unsettled in different high courts about digital currencies were taken by the apex court. Further, they barred all the petitions so that in future they wouldn’t get into any appeal about the circular issued by RBI regarding the prohibition of the trading of these currencies.