Crypto Kanoon, a Twitter account dedicated to curating new developments in the Indian blockchain and cryptocurrency industry, has confirmed that the Supreme Court of India heard the case ‘Internet and Mobile Association of India (IAMAI) vs. The Reserve Bank of India (RBI)’ on August 14, 2019. The IAMAI counsel reportedly argued that the RBI overstepped its jurisdiction when it proposed a total ban on cryptocurrencies.
SC Hears the Case on RBI’s Cryptocurrency Ban
In the hearing, the IAMAI Counsel Ashim Sood explained that banking support is necessary for cryptocurrencies to gain wider adoption. Sood further argued on the legality of the RBI ban, claiming that the RBI does not have the jurisdiction to ban since the decision of prohibiting or regulating an asset must come from the legislature. A ban that, if applied, Tim Draper believes would set the country back by 40 years.
The counsel also provided references to various judgments that support the argument that the RBI cannot step out of its power, which has been set out in the Banking Regulation Act. Sood added that action against private businesses in the form of banking restrictions is, therefore, illegal. The counsel also pointed out an instance when the RBI admitted to not having jurisdiction over the cryptocurrency market, especially since the RBI Act and Payment Settlement Act do not apply to the asset class.
In a previous hearing on August 8, the IAMAI counsel said that RBI’s proposed ban violated the Constitution’s Article 19g, which gives citizens the right to practice any profession and carry on any occupation, trade or business. In response, the court said that since citizens have the freedom to switch to foreign banks and exchanges, Article 19g cannot be levied.
Other Countries Want to Regulate Cryptocurrencies
The counsel also said that no country has found cryptocurrencies to be harmful, and added that countries are moving to regulate the industry rather than banning it altogether. They provided the court with data explaining how other countries are handling cryptocurrency.
While the EU, China, and France were initially discussed, the counsel specifically pointed out Japan as a country that fully regulates exchanges under its own Payment Services Act and has forced exchanges to follow KYC and anti-money laundering laws. Digital currency regulation in all G20 nations such as Singapore, Saudi Arabia, Malaysia, South Africa, UK, and the US were also discussed.
The counsel concluded by acknowledging some detrimental effects of cryptocurrencies while arguing that the asset needs to be regulated in accordance with international standards. When asked what the purpose of a cryptocurrency is, the counsel told the judge that electronic tokens incentivize people to maintain the integrity of the underlying blockchain.
Do you think the Indian Supreme Court will rule in favor of the IAMAI counsel? Let us know your thoughts in the comments below.
Buy and trade cryptocurrencies with a 100x multiplier on our partner exchange, StormGain.
Images are courtesy of Shutterstock, Twitter.