Cryptocurrency in many ways have troubled the ever-cautious dearly beloved Reserve Bank of India. At the press conference on April 5 when the banking ban on cryptocurrency was announced, the deputy governor of RBI Mr. Kanungo said,
“If they (Cryptocurrency) grow beyond a critical size, they can endanger the financial stability”
While I beg to differ for a simple reason that currently Cryptocurrency market cap is lurking around $400 Billion. That would make the market cap of less than 10 big companies in India like Reliance industries with a market cap of $89 Billion. A US company Apple on the other hand is at a whopping $900 Billion market cap. The Cryptocurrency market is very small.
And then out of the Billions of Dollars traded on cryptocurrency every year, multiple reports have suggested that India’s share is fairly less than 10%.
So, it is highly unlikely that crypto can destabilise market in India. Also, only 481 Million people in India has access to internet which is roughly a third of the population and only 7% of the recently surveyed users hold Cryptocurrency.
And yet, RBI has arm twisted the banks into submission to curb this budding industry of cryptocurrency trading. In response, some exchanges and individuals went knocking the door of Supreme court for an intervention. But alas, Supreme court rejected the interim injunction – a quick relief from the RBI ban and put the case for hearing on May 17.
The battle of cryptocurrency traders vs the RBI is now no less than David Vs Goliath from the biblical era as the small community of traders which majorly comprises of young adults are on one side praying for a positive outcome and banking their hopes on the few lawyers who will represent them in Supreme court tomorrow, while on the other side is the central bank of India closing in on cryptocurrency trading for “safety” of the citizens.
Case in the Supreme Court
On May 17, Hon. Supreme court will hear a case against the Reserve Bank of India for the regulation of cryptocurrency in the country. What began with two Bhowmick brothers in November 2017 with a writ petition to give clarity over Cryptocurrency now hangs as the only hope for the virtual currency’s future within the sub continent.
As many as six exchanges and a few individuals have separately filed petitions against the RBI, the one Rajdeep Singh Vs RBI appealed for an interim injunction – asking the Hon. SC to give immediate relief from the RBI’s ban while the case continues in Court. Unfortunately it was rejected.
However, that and other petitions are now tagged along with Bhomick’s case and are to be heard today.
RBI granted permission to move all High Court Applications to Supreme Court
In an order passed on May 16, the Hon. Supreme court has allowed liberty to RBI to pass on all cases of the similar matter to Supreme court, if pending in High court.
One such case is the famous CoinRecoil Exchange case pending to be heard in the Delhi High court on May 24. CoilRecoil may get the news to move the case to Supreme court soon enough.
RBI cannot decide on the legality of Bitcoin/Virtual Currencies
In a response to Bhomick’s petition, the RBI replied with a 15 page notice. An article on The Hindu reported an excerpt from the notice that says,
“In the instant case, the issue of legalising virtual currencies (VCs) like bitcoins or otherwise will have implications on the roles and responsibilities of other regulatory/ enforcement agencies. Therefore, the RBI cannot unilaterally decide for the government on the legality of bitcoins,”
Since RBI cannot ban cryptocurrency, they are cutting the support system for the traders – Banks.
Court Holidays can be a Huge trouble
Supreme court will be on vacation starting from May 21 to July 1. If the case does not reach a resolution, the traders stand to lose the battle as RBI’s deadline falls roughly on July 5. So the lawyers have one shot at convincing the court to put a stay on RBI’s decree.
There is but one more chance. If the case doesn’t come to a conclusion today, the lawyers are allowed to file an affidavit for an urgent hearing on May 21 as seen on the Supreme Court Website. We will find out what happens in a few hours.
To summarise – Bhowmick went to court against Union of India, RBI and few other bodies to make a decision on Cryptocurrency in November 2017. The case did not go to hearing until May 11 as most of the respondents did not register on time. At the same time RBI replied saying they cannot ban virtual currencies.
RBI also asked the regulated entities like banks to wind up business with companies and individuals trading in cryptocurrency. Few individuals and exchanges appealed in Supreme court for a quick relief which was denied but the case was attached to Bhowmick’s case and will go into hearing on May 17, today.
What do you think will happen today in court? Let us know in the comments below
Cover Image: MaxPixel