Right now in India, the country’s apex court is hearing the crypto case in detail. It has been three days since and many arguments have been heard from both sides. (RBI vs IAMAI)
The IAMAI is a not-for-profit industry body registered under the country’s Societies ACT, 1896 whose mandate is to expand and enhance the online and mobile value-added services sectors in India.
The case comes at the heels of RBI’s controversial imposition of a complete ban on banks dealing with crypto institutions way back in April 2018, coming into effect in July the same year.
The ban forced many crypto exchanges in India to shut shop and others were forced to rapidly change their business models to continue competing. Read on to find out all the points of contention that were discussed in the 3 day period.
Against RBI, the legal counsel leading the case is Ashim Sood who is for the Internet & Mobile Association of India (IAMAI).
Before presenting the details of the effects of the RBI’s ban on the nascent crypto industry in India, Sood gave the court a brief on the nature of cryptocurrencies and the possible use cases of the blockchain technology which could in essence benefit the financial service industry as a whole.
He went on to argue against the classification of cryptocurrencies as currencies and outlined the oscillatory nature of the same between a store of value and a medium of exchange. He said that no individual is required to use crypto as legal tender and while ‘casino chips’ may be valuable to those whole gamble, it has no value to people outside the casino.
The second day saw the arguments center around the global context of the cryptocurrency ban. Sood argued that majority of countries don’t recognize crypto as a form of legal tender. He blasted RBI for overstepping its regulatory mandate and called its decision “arbitrary”.
The third day opened with Sood arguing that prior legal activities may only be regulated by a specific policy. He pointed out contradictions in the RBI’s case against crypto stating that the institution’s decision was made without any independent research and that no international jurisdiction has declared that regulation of cryptocurrency is impossible, making RBI the only institution to do so.
The Supreme Court will continue to hear the rest of the proceedings in the upcoming days before making a decision. Even though the government has delayed the introduction of a draft bill regarding the ban of cryptocurrencies back in the winter session of 2019, Indians are uncertain of the future of cryptocurrencies. The government, it seems, intends to launch a state-backed “Digital Rupee” issued by the Reserve Bank of India which many see as an indicator of a ban on other cryptocurrencies.
What do you think of the arguments presented in the Supreme Court? Did the RBI overstep its mandates? Let us know in the comments!