Indian Supreme Court Continues the Crypto Hearing; RBI Defends Its Ban Power

RBI vs. crypto hearing

Thursday saw the continuation of the Supreme Court of India’s hearing on crypto and RBI case.

According to a report from the courtroom, Shyam Divan, central bank’s counsel emphasized his opinions from a day earlier. He began by reciting RBI’s response on the representation of cryptocurrency exchanges and described the current situation of Indian operated peer-to-peer exchanges and their services of funds transfer abroad given to the Users. He asserted that it makes them vulnerable to the associated risks with the Foreign Exchange Management Act and anti-money laundering along with fighting sponsorship of terrorism.

The judge, on the other hand, revealed that RBI circular just prevented banks in providing assistance to cryptocurrency exchanges but is nowhere near the thwarting cryptocurrency trading. The response of the counsel to this was that it was the bank’s decision to validate the crypto trade and halt them. The judge then asked him how banks would know that without an investigation session and the transaction source.

The counsel asserted that crypto trading was still active, but the crypto volumes did decrease. The judge quickly interrupted him again, clarifying:

If you see in 2017 the graph was going up and from 2018 it is globally declining. It is not because of your circular that prices are coming down.

Then the counsel acknowledged that though the regulation isn’t very efficient yet succeeds in discouraging certain crypto transactions.

The counsel agreed on the fact that there might be a number of other factors besides the RBI circular. Judges then asserted that being a dedicated and loyal blockchain Contributor is much beneficial than meddling with it.

Counsel then referred to the rulings that state the minimal intervention by the court. The intervention is

limited when an expert committee like RBI has acted under its statutory power as it is an expert body for a particular domain,

he said.

After this, RBI’s power to legislate, which included the ability to ban was discussed. The counsel agreed by saying that the central bank possesses statutory power in taking actions it did. RBI then added that it has been warning crypto trading while keeping a close check on the industry since 2013.

Then IAMAI discussed blockchain, with an instance of Ethereum. He said that cryptocurrency is required to keep up the blockchain efficiency.

Sood then spoke against it with reference to the past few cases. He said that

When RBI knows that there are legitimate uses of crypto. Then RBI should make a determination of those uses and not turn a blind eye by just citing illegitimate uses.

IAMAI counsel finally said that not even one finding regarding crypto’s link with the payment impact of the system had been discovered. The report by the inter-ministerial committee that had the ban’s draft bill was also devoid of any such mentions.

Though RBI claims its intention to take action in consumer’s interest, the counsel recited the recommendations of an interdisciplinary committee that failed to highlight market integrity, payment system, financial stability, credit system, and monetary policy.

The RBI vs. crypto hearing in the Supreme Court of India has witnessed tremendous drama in the last few days. The hearing will resume again on Tuesday, January 28.

After following the events of the courtroom yesterday, CryptonewsZ reported that RBI had not done good research before announcing its anti-crypto directive.