Crypto ban imposed by India’s central bank, Reserve Bank of India (RBI), has provoked the Indian Supreme Court. Besides locals, the Supreme Court was dissatisfied with the way RBI was tackling cryptocurrency regulations in India.
Overall, the justification and reasons behind the ban provided by RBI were so dissatisfying that the court decided to give RBI another chance. Consequently, a two week time is given to RBI for explanation and justifying the crypto ban to the court.
Apart from mishandling cryptos, the Supreme Court outlined several flaws in the hearing. For instance, while RBI was reading out the disadvantages of cryptocurrencies, the court aggressively snapped the counsel. The court explained that consumer protection was the responsibility of the government so RBI shouldn’t be concerned with it.
The counsel for RBI is reading the IMC report.
And reading out the disadvantages of Crypto.
The judge interrupts and asks how you are concerned with the consumer protection, it is not your concern. It is Govt. concern and not yours.
— Crypto Kanoon (@cryptokanoon) August 21, 2019
Back in July 2018, RBI stricly abstained people from interacting with the crypto exchanges. In the past, the central bank of India even openly disclosed that no services would be provided to people or businesses using cryptocurrencies.
While discussing all these previous actions of RBI, the Supreme Court Justice, Rohinton Fali Nariman, never stepped back from unleashing some intensified criticism. On the occasion when the RBI counsel referred to India’s Payment and Settlement Systems (PSS) ACT 2017, for explaining payment systems, Nariman interrupted the proceedings. Again telling that RBI is stepping out of its bound and told that PSS ACT was irrelevant.
Justice Nariman interrupts and says that it is not RBIs case that exchanges are covered by PSS Act so this is immaterial.
Counsel answers that prima facie they are not, but there is potential threat to undermine monetary policy.
— Crypto Kanoon (@cryptokanoon) August 21, 2019
While representing RBI, Shyam Divan put forward several observations that were harmful to the country. He was of the view that cryptocurrencies such as bitcoin and altcoins are a means of payments. He stated that if their use increases substantially, the country’s monetary and payment systems would also be affected.
READ ALSO: Bitcoin Ban: Crypto India Reacts to Draper’s ‘Shame on India’ Remark
Furthermore, he added that the possibility of cross-border payments through cryptos was is problematic for the central bank. Finally, he concluded that bitcoin and other cryptos are just some Ponzi schemes.
As Divan defended RBI, Ashim Sood who is the counsel for the Internet and Mobile Association of India (IAMAI) shared his thoughts in favor of cryptocurrencies as he shed light on the crypto regulatory models taken by G20 countries.
In addition to this, he also brought up recommendations of the Financial Action Task Force (FATF) that addressed ways for minimizing and utilization of cryptos in illicit activities. According to him, the claims made by the RBI counsel that cryptos are a Ponzi scheme wasn’t backed with sufficient data.
Nakul Dewan, representing on behalf of crypto exchanges, also registered his take against the bitcoin ban imposed by RBI. He focused on explaining the benefits of blockchain in the Fintech sector for financial and banking institutes.
READ ALSO: India’s Leaked Anti-Crypto Bill: Leave the Finance Part Not Technology
India has been focusing to devise a crypto framework since 2017. However, the country has not been successful in coming up with crypto regulations. To date, the country has failed to come up with any kind of developments that could satisfy either locals or the Supreme Court. India is often included in talks where bitcoin mass adoption and other cryptocurrencies are focused. This is largely due to the fact that India’s capable of being a very large crypto market.
Under these circumstances, opposing the actions of RBI, the latest take of Supreme Court has been quite surprising. Finding several inadequacies in RBI’s response, the fate of cryptos in India is delayed by the court. In the future, it would be of interest to see how the emergence of crypto adoption steer its way in the sub-continent region.
Court orders:
After hearing arguments we are of the view that detailed representations by exchanges purusant to this court’s order 17.05.2018, have not been answered point by point, therefore RBI to reply them with in 2 weeks. SG to furnish various docs within 1 week.
— Crypto Kanoon (@cryptokanoon) August 21, 2019
READ ALSO: After Banning Bitcoin, India’s Central Bank is Working on Tech Behind BTC
