The latest statement by the Indian Supreme Court in an ongoing court case indicates it might be warming up to crypto. This case began after the Reserve Bank of India ( RBI ), India’s central bank, decided to ban crypto activities by banks. However, RBI has stated in court that it has not banned crypto in India.
What the Supreme Court had to Say
According to a statement issued by the Supreme Court, it questions the wisdom of banning crypto. The Supreme Court said that banning crypto would not stop crypto trading. However, it would hurt crypto businesses in India that had invested in the crypto sector. The court noted that being an honest contributor to the blockchain was more profitable than trying to hack it.
In its argument, RBI explained that crypto exchanges allow users to move funds abroad. As a result, this would expose them to the risks that come with the Foreign Exchange Management Act, Anti-Money Laundering, and Combating Financing of Terrorism laws.
However, the Supreme Court noted that RBI had only stopped banks from dealing in the crypto sector. This had not stopped crypto trading online. In its argument, RBI claimed that its circular in 2017 what caused crypto trading volumes to drop. However, the judge noted that this was in line with global trends and had nothing to do with RBI’s circular to banks. The RBI had to concede that there were other factors, which might have influenced the drop in trading volumes in India. In their arguments, RBI argued that they had the statutory authority to regulate, which included the power to prohibit crypto.
The Internet and Mobile Association of India (IAMAI) counsel made the counter-arguments. The counsel for IAMAI argued that the law already allowed crypto to be used as a medium of exchange. He pointed to the Central Goods and Services Tax Act, under which crypto is taxed. However, he pointed out that not many people were using it for this purpose due to its highly volatile nature.
He then pointed out that crypto and blockchain went together. In his argument, crypto was necessary to maintain the efficiency of blockchains. While he admitted that crypto and blockchain could be separated, there was a valid reason for them to exist together. He said that crypto created use cases for blockchain in certain aspects.
In his argument regarding the blanket ban on crypto, he argued that while RBI had cited illegal use cases for crypto, there were also illegal use cases for fiat currencies. Counsel added that there was no evidence that crypto had affected the payment system of India. He also added there was no merit to the claim that authorities were unable to stop crimes committed using crypto.
While the case is still ongoing, it is quite exciting to see a judge in the top court of one of the largest nations on earth having such a good grasp of crypto and the blockchain. It might be a sign that India’s crypto and blockchain market could still thrive despite opposition from the central bank.
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