In an earlier hearing held on August 14, the crypto community witnessed the Internet & Mobile Association of India’s (IAMAI) stance on cryptocurrency that urged the government to create regulations around cryptocurrencies rather than ban them. Today’s hearing focused more on why RBI’s cryptocurrency ban is unjust and has served no purpose.
Per the live updates shared by Crypto Kanoon, an Indian crypto platform that provides information on the status of cryptocurrencies in the country. Ashim Sood, counsel for IAMAI, continued his arguments in favour of regulating cryptocurrencies. The long hearing focused on how other countries are regulating cryptocurrencies and how RBI wrongly banned them among other topics. The argument is not over yet and it will be resumed tomorrow.
You can track the argument made during an earlier hearing, on August 14 – HERE
IAMAI Counsel – Crypto Cant be banned Simply Because It Involves Risk
As for today’s hearing, Sood urged that the RBI’s decree is “against the doctrine of Proportionality”, meaning that the RBI’s 2018 circular to ban crypto was too harsh. It was not proportionate to the problem presented by cryptocurrencies. Counsel presented the various approaches to crypto being taken by regulators across the world to Supreme court, including Wyoming, USA’s laws with regards to crypto assets and custodial services, licensing requirements employed in New York and the guidelines of G20 countries to regulate crypto.
Sharing UK’s token classification, the counsel compared RBI’s ban with the approach taken by UK regulators. Crypto Kanoon reported;
UK is one example which had the same risks as recognized by India. Regulators there exercised their powers intelligently and they studied the technology. UK realized that you cant prevent anybody to manage their affairs dealing with Crypto. Whereas RBI has not applied mind.
Mr. Sood’s arguments continued around how the RBI circular doesn’t reveal any purpose and it shows that no study was conducted before implementing the ban. He highlights that Indian regulators are proposing the crypto ban simply because it involves risk, but even the stock markets involve risk. People have moved from centralized crypto exchanges to P2P crypto exchange, and therefore, despite the banking ban in early 2018, the RBI has not achieved anything.
RBI purportedly took action in consumer protection, anti-money laundering, terrorist financing, etc. However in one of its doc (post circular), RBI realized that it pushed the transparent exchanges to dark port, people are resorting to peer to peer using cash.
Since India already has consumer protection laws in place, Sood said that they could be made applicable to crypto whereas other/special provisions could also be formulated to deal with peculiar situations.
Judge – Report Seems to Guide Only Technology and Not Crypto
After a long argument by Mr.Sood, Ld. Senior Advocate, Mr. Nakul Dewan who was representing exchange’s petition explained what money is about and what crypto versus fiat means. He presented how India and Iran had the option of peer to peer transactions to access fuel when the US objected. Also, the six critical concerns of the RBI were put forth with counter-arguments.
Considering the facts presented in detail along with Inter-Ministerial Committee’s report (IMC) the Judge finally responded saying, “this report seems to guide only on the aspect how the technology can be used by Intra/ interbank transfers. And not Crypto”.
RBI – Bitcoin and Crypto is a Ponzi scheme, price bubble
The court resumed the hearing after lunch and the argument began in favor of RBI’s action. It outlined how crypto with few monetary characteristics had a direct impact on the monetary and payments system.
If more and more people continue to adopt them as means of payment then it might compromise our monetary system badly. It also has the ability to cross border transactions. That is where the problem lies.
The counsel also highlighted a report by former finance minister Arun Jaitely who gave a nod of approval for Blockchain technology but denied considering cryptocurrencies. The hearing also highlighted a bigger concern of RBI with regards to cryptocurrencies – its use as a form of payment for illicit activities.
No conclusive decision emerged from the hearing today, but the session will resume tomorrow.