Indian Supreme Court Heard Crypto Case in Depth Today
The Indian supreme court finally heard the crypto case today after postponing it several times. The court addressed the government’s crypto policy as well as the writ petitions challenging the banking restriction by the central bank. The latter was heard in some detail while the former was further delayed at the request of the government.
The Supreme Court of India addressed two crypto-related issues Thursday after repeatedly postponing hearing them. The first issue concerns the banking restriction by the central bank. The Reserve Bank of India (RBI) issued a circular in April last year banning regulated financial institutions from providing services to crypto businesses.
According to Crypto Kanoon, an Indian platform for crypto regulatory news and analysis, the provisions of the RBI Act and the Banking Regulation Act, along with the circular in question, were all analyzed in court to ascertain whether the central bank has the power to impose such a ban. The “RBI is only a delegatee of power which cannot exercise [the] same powers as Parliament which has a direct impact on legitimate businesses,” the platform conveyed.
The counsel for crypto exchanges argued that the “RBI restricting banks from providing services to crypto [businesses] 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,” Crypto Kanoon detailed. The counsel showed the court that crypto exchanges have suffered losses due to the banking ban including a decrease in the number of users. The court further asked about companies and businesses that were shut down due to the banking restriction. “Why can’t you work without [a] bank?” the court continued to ask. The counsel explained that “Any settlement taking place will be converted into
cash,” the platform conveyed, elaborating:
Technology underlying the
blockchain and crypto is being explained to the Hon’ble judges … Manner in which other countries have treated cryptos has been discussed.
In addition, the counsel argued that
cryptocurrency “must not be equated to sovereign currency i.e., rupee etc,” emphasizing that the former is a commodity while the latter a currency. Crypto Kanoon added that Thursday’s hearing ended with the court setting a follow-up date to resume hearing the case on Aug. 14.