Supreme Court Hearing Continues on the RBI Banking Ban

The hearing on the RBI banking ban continued in the Supreme Court today. This was the third formal hearing in the case, after August 8th and August 14th. Blockchain regulatory analysis platform Crypto Kanoon live-tweeted the happenings of the case again.

Ashim Sood, the counsel representing IAMAI, continued making strong arguments against the RBI ban. Apart from citing the fact that the RBI actions are against the doctrine of proportionality and not backed by any study, he also presented global regulations such as the ones in Wyoming and New York in the US.

The IAMAI counsel argued that the risks faced by countries such as the UK are the same as India. However, the regulators in the UK exercised their powers intelligently and studied the technology. He once again iterated that no study was conducted by the RBI. Ashim also touched upon the concerns regarding consumer protection, volatility, exposure of traders to financial and legal risks and usage of bitcoin and crypto in illicit activities. He stated that existing laws can be used to address these concerns and cited previous judgments to support his arguments.

Nakul Dewan, Ld. Senior Advocate representing the Exchanges’ Petition i.e., Rajdeep Singh & Ors. v. RBI, then started his arguments. He spoke about the different types of cryptocurrencies, history of finance and the Inter-Ministerial Committee report. He argued that crypto is not money but an intangible property, and outside the ambit of monetary policy.

The advocated also cited the self-regulatory measures implemented by cryptocurrency businesses in India and stated that it is the investors’ right to choose to invest in cryptocurrencies despite knowing about the volatility of prices. Nakul Dewan also argued that bank is only a custodian of money and cannot restrict access to money unless sanctioned by legislation. The counsel added that there is no prohibition on crypto except the RBI banking ban and the same must be struck down.

Shyam Diwan, Ld. Sr. Advocate, then started his arguments in favour of RBI. The counsel touched upon cross-border transactions, impact on monetary and payment systems and use in illicit activities. Diwan also referred to former Finance Minister’s Arun Jaitley’s budget speech statement on cryptocurrencies. In addition, he spoke about exchange hacks and Ponzi schemes.

The hearing will now resume tomorrow and the RBI counsel will continue making his arguments. It will be followed by a rejoinder by the petitioners.

You can access all the details through Crypto Kanoon’s tweets here:

Our Indian viewers can watch our analysis here: