Supreme Court of India Hearing Petition against the Ban on Cryptocurrency
Supreme Court of India has been actively hearing the cryptocurrency industry versus the RBI petition since the last week. The arguments on both sides are heating up with every passing day.
The ongoing proceedings of the Supreme Court are against the Reserve Bank of India’s (RBI) ban on bank dealings with crypto-related businesses. On January 22 and January 23, hearing on cryptocurrencies case witnessed heated arguments between Advocate Ashim Sood from for the Internet and the Mobile Association of India (IAMAI) and between the Senior Advocate Shyam Divan for Reserve Bank of India.
Owing to several public and crypto industry-led petitions, under the banner of IAMAI, many crypto exchanges and other entities have filed a collective petition against the RBI’s restriction on offering the bank services to the crypto-businesses back in April 2018, which was proceeded in the next month.
In April 2018, the RBI had notified all the financial institutions including the banks to not to provide services to the crypto-related firms to protect investors and consumers' interest and curb money laundering cases.
The Proceedings on 22 and 23 January 2020
Continuing with Sood’s last week’s argument that the government, as well as the RBI, had not studied and analyzed the research material to support their ban in April 2018, On 22 January, RBI advocate Shyam Divan countered the argument that the RBI had deeply studied the risks involved with the new asset class and the April 2018 banks circular on ban had been passed considering all the aspects.
Sood further countered that the RBI has been attentive only towards the illegitimate use of cryptocurrencies and not heeding towards the legitimate applications. Moreover, there is no substantial proof that the sector is adversely impacting the domestic payment network.
Divan defended that the Reserve Bank of India (RBI) has not imposed any formal ban on cryptocurrencies. It has only been warning against the risks involved in its trading.
The Details about the Petition
The case is being heard by a three judges Bench comprising of RF Nariman, Aniruddha Bose, and V Ramasubramanian.
The proceeding will be resumed on 28 January 2020. On January 27, two more petitions will also be heard against the RBI regarding the same matter.The RBI had issued cautionary notices about the involved risk in digital currencies to the holders, investors and traders of crypto assets on December 24, 2013, another on February 1, 2017, next on December 5, 2017. The April 6 in 2018 circular has been challenged in the Supreme Court.
CBW - External Analyst