The Supreme Court may have adjourned discussions around cryptocurrency regulations to January 2020, but it heard the arguments on the other part of the crypto matter – the constitutional validity of the RBI banking ban.
According to blockchain regulatory analysis platform Crypto Kanoon which live tweeted the entire hearing, the counsel representing the exchanges argued that the RBI restricting banks from providing services to cryptocurrency businesses is a colorable exercise in the guise of consumer interest. The counsel stated that the Central Bank can exercise power in public interest only to the extent as provided under the law such as the interest of depositors and borrowers.
In addition, the provisions of the Reserve Bank of India Act and Banking Regulation Act were also analysed to know whether RBI has the power to issue such a circular or not. The RBI circular regarding the banking ban was also analysed in India’s apex court.
The exchange’s counsel further argued that RBI in its cautionaries gave an impression as if some authorisation was required for exchanges to run. However, there is no such law regarding the matter. They also put forth a strong argument that RBI cannot exercise the same powers as the Parliament which has a direct impact on businesses.
Furthermore, the counsel also presented evidence about the losses they incurred due to the RBI circular. It also informed the Court about the need for banks, underlying technology behind cryptocurrencies and regulatory examples in other countries.
The case will now be resumed on August 14th, 2019.
You can check out the entire Crypto Kanoon tweet thread for more details here: