Companies file petitions against RBI decision

Flintstone Technologies Pvt. Ltd, a cryptocurrency trading company, has filed a petition in the Supreme Court of India to set aside the Reserve Bank of India (RBI) circular that prohibits banks and financial institutions from dealing in digital currencies. The plea was heard by Justice Rajeev Shakher on Friday.

Maharashtra-based Flinstone Technologies has called for the repeal of the RBI circular passed on April 6, calling it an “unfair and unconstitutional arbitrariness.” The company claims that the circular “restricts” all institutions regulated by the apex bank in areas ranging from retail services to cryptocurrency businesses.

The company, which claims to launch a cryptocurrency wallet for Bitcoin and Money trade coin, said the RBI has not given a single compelling reason for its decision. Flintstone Technologies also stressed that the RBI issued this circular to curb crypto trading.

On April 22, the court called on the Centre, RBI and the GST Council to answer after another company based in Gujarat challenged the circular.

Digital Ecosystems Pvt. Ltd, headquartered in Gujarat, was proposing to create a cryptocurrency exchange system for users in India and had already made significant investments. In August, she planned to release an exchange system called “Coin Recoil”. However, due to the RBI circular, the company will not be able to avail banking services required for its operations, the petition said. 

According to the circular, RBI-regulated entities are prohibited from “providing any services related to cryptocurrencies, including the transfer or receipt of money to accounts involved in the trading of digital currency.” Companies providing such services have been given three months to comply with all Reserve Bank requirements.

Flintsote Technologies representatives said that such strict regulation of cryptocurrencies “increases uncertainty regarding transaction processing and negatively impacts business.”

According to https://www.livemint.com