Reserve Bank of India (RBI) did not recognize Bitcoin and other digital currency assets. Moreover, according to employees of the Bank, cryptocurrencies are not a reliable payment system, as blackany not controlled by the Central authority.
Representatives of RBI said that the status of a "currency" can only get those financial instruments that have identical or similar characteristics with checks, postal money orders and money transfers.
In April 2018, Reserve Bank of India has ordered financial institutions to cease cooperation with local cryptocurrency exchanges.
In an official statement, Director General of the RBI Jose Kottoor says the following: "Financial institutions whose activities are regulated by RBI, have to curtail all services to individuals and legal entities that engage in cryptocurrency. Companies are required to comply with the order of the Bank for 3 months."
Blockchain company Kali Digital Ecosystems filed a lawsuit in the Supreme Court to cancel the decision of the RBI, pointing to the unconstitutionality of the decision of the Bank. The firm has plans to open a cryptocurrency exchange in August, however, the implementation of its business plan is in question in connection with the prohibition RBI. The Supreme Court made the decision to leave the order of the RBI , unchanged.
Indian cryptocurrency investors criticized the actions of the Reserve Bank and stated that the ban violates their constitutional rights to freedom of trade. To clarify the situation, RBI has allowed research companies Blockchain BRICS to analyze the market digital assets and to offer an alternative to the accepted ban. However, in light of recentx the RBI statements on virtual currencies, traders hope for a favorable outcome seem unreasonable.