The Cryptocurrency vs RBI case resumed the hearing today i.e on 20/8/2019 in Supreme Court, Court No. 5.
According to a series of tweets by Crypto Kanoon, the counsel for IAMAI, Ashim Sood, started the session by explaining examples of various countries and states and how they went about regulating cryptocurrency.
He also explained the law formulated by Wyoming (USA) to regulate Crypto assets and custodial services (Exchanges). Apart from the United States of America, he also pointed out regulations in the European Union were taken into consideration.
Documents of G20 meeting 2019 is being read. It said, most of the countries in g20 nations are inclined to regulate Crypto and are not treating industry players as a bunch of criminals.”
Sood said, “Yes there are dangers associated with cryptocurrencies. We have countries like UK, US, who are regulating cryptocurrencies after understanding the technology. The UK realized that you can’t prevent anybody to manage their affairs dealing with Crypto. And on the other, we have China and Indonesia. While it might not matter which side India falls, there is no point in banning something just because it has dangers”
Referring to the circular, Sood said, “RBI purportedly took action in consumer protection, anti-money laundering, terrorist financing etc. However, in one of its post circular, RBI realized that it pushed the transparent exchanges to dark port, people are resorting to peer to peer using cash.”
He further added, “India has Consumer protection laws in existence which can be specifically made applicable to Crypto and special provisions can be formulated to deal with peculiar situations. Also, Anti Money laundering law of India is a comprehensive law which provides for disclosures, maintenance of records etc. It can be made applicable on Crypto as well.”
Sood believes that RBI circular is void on the ground of vagueness. It gives no definition of Crypto and seeks to crack down on all indiscriminately.
Later, a judgement was being read which holds that vagueness of rule is detrimental to its validity. With this Sood concluded his arguments.
Further, senior advocate Nakul Dewan, started his arguments on the interaction between Virtual currencies and Fiat currency on behalf of cryptocurrency exchanges in India. He has briefed the court on how the use of money evolved in the worlds from barter to gold to fiat.
He also pointed out when the United States of America objected to India and Iran’s deal of fuel, India took the recourse of fuel in exchange of fuel which would be classified as ‘peer-to-peer’ transaction.
The senior advocate listed the central bank’s concerns and the counter-arguments namely:
1. No authorization to Crypto business (No law prescribes authorization),
2. Hacking (So is with the Digital banking)
3. consumer protection issues (Consumer protection laws can deal with it)
4. No inherent value (Even fiat is not backed by anything as a matter of fact)
5. Volatility (Stocks also have that)
6. use in Illicit activities (Laws like KYC AML etc. can be made applicable
Dewan also explained the different types of Cryptocurrencies and Utility token with an example of shopping points and Airlines miles. He also explained the advantages of blockchain technology in the banking and financial sectors.
Further, the Inter-Ministerial Committee’s report was being readout.
The judge said that the report seems to guide only on the aspect of how the technology can be used by Intra/ inter bank transfers. And not Crypto. However, Dewan pointed out it also made provisions for official digital currency.
At this point, the court dispersed for lunch. Stay tuned to know more. The article will be updated soo.
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