After a long, long, wait, finally the crypto matter in India is being heard before the apex court in the country, the Supreme Court.
In the court, the counsel representing the Reserve Bank of India (RBI) started off, by asking the court for another adjournment, but for once the court refused and asked them to begin the arguments, with no further delay. The adjournment was asked for, as the government said it was planning to bring up the draft bill submitted by the Garg Committee, in the Winter Session of the Parliament.
The proceedings began with, the Provisions of Reserve Bank of India Act and Banking Regulation Act being analysed in order to know whether RBI has power to issue such circular or not.
The circular in question was issued last year in April, when the RBI banned the banks affiliated with it, to stop providing services to cryptocurrency exchanges.
At the time, the Deputy Governor of RBI, BP Kanungo had said, ” Now we have decided to ring-fence the RBI regulated Entities from the risk of dealing with entities associated with dealing with virtual currencies. They are required to stop having relationship with entities dealing with virtual currencies within three months.”
Crypto Kanoon posted live updates regarding the hearing by stating, “Counsel for exchanges is arguing that RBI restricting banks from providing services to Crypto is a colorable exercise in the guise of consumer interest. It can exercise power in public interest only to the extent as provided under law such as interest of depositors,borrowers etc.”
The court resumed and arguments started on RBI banking ban.
Counsel for exchanges is arguing.
— Crypto Kanoon (@cryptokanoon) August 8, 2019
It was further examined and the realization was shared that the RBI actually had no power or authorization to stop exchanges from running in the country. Crypto Kanoon provided the arguments presented by the exchanges’ counsel which stated, “If Crypto was a commodity then SEBI could have stepped in but RBI has nothing to do with it. Cryptos are not the means using which laws are violated in fact there are many ways. This way can also be regulated. RBI is only a delegatee of power which cannot exercise same powers as parliament which has a direct impact on legitimate businesses.”
The court then asked the plaintiffs as to why it was not possible to work without banks and was told that any settlement taking place will be converted into cash. Users are owners of bitcoin kept in my wallet, when they wish to sell, they sell their bitcoin through my bank account.
The court then asked about the number of exchanges that had to shut down due to this circular. The counsel showed from page 39 of their writ petition that they have suffered losses and also showed page 199 stating that exchange has lost users due to banking ban.”
The judges then asked for the manner in which cryptocurrencies was treated in other countries. In response the counsel explained the concept of blockchain technology and judgement from Brazil’s supreme court is being read out.
The court hearing ended after this and will be heard next on August 14.
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