Update: Supreme Court has Quashed the RBI circular on March 04. 2020, deeming it unconstitutional.
The Supreme Court of India is hearing arguments in a trial of Cryptocurrency community vs Reserve Bank of India. The later has put a ban on all the regulated entities such as Banks, NBFCs, etc to not support any individual or businesses that are dealing in Crypto assets. The fight is for the banking rights of Crypto community.
As the opposition, which in this case are the counsels of Internet and Mobile Association of India have laid out their arguments, the court asked if the community is concerned with bitcoin or all Crypto?
To which the counsel answered, both.
The supreme court judges then asked to understand the technology, understand cryptocurrencies. And as we write this, the counsel of IAMAI is explaining Crypto assets and the underlying technology, blockchain to the Supreme Court of India.
Arguments of IAMAI
The Crypto Vs RBI matter was listed for hearing today, to pick up from where it was left off last week. The case went into hearing around 10:50 AM and it being heard as we write this.
The counsel of IAMAI, Ashim Sood was asked why can’t we use banks that are not governed by the RBI, to which he replied, Only foreign banks are there and exchanges use that there will be problem with Outward remittance which is hit by FEMA regulation.
The court then argues that one can take permission from authorities for outward remittance and says the article 19(1)(g) is not applicable as there are alternatives to dodge the banking ban.
After the rocky start, the counsel picked up pace and argued that the matter is about whether or not RBI has the right to put out such a circular by sharing various past judgments. Counsel argued that bans and regulations are legislative powers and RBI is just an enforcer or a legislature.
Sood also argued, that RBI in its reply itself admits that RBI does not have jurisdiction to speak on the legality of Crypto as it is neither coins nor currency and RBI Act and Payment Settlements Act are not applicable on Cryptos.
Once Sood submitted his arguments, the judges began questioning him regarding the technology.
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