Hello, Blocklogy Community Members.
Since you all are interested in the potentiality of Blockchain you might have heard about Crypto vs. RBI hearing. This article is the summary of hearings to date.
Indian Supreme Court heard the crypto case in detail over four consecutive days this month. In this intense argument, judges learned how other countries regulate this new sector.
Day 1 – 14th January 2020
Court called this hearing Crypto matter. Crypto matter hearing started at 3:40 PM, as directed by court Advocate Ashim Sood started the arguments from the beginning. Mr. Sood read out the RBI Circular and explaining the effect of this restriction. After, he explained the nature of Cryptocurrencies, along with DLT by taking examples of Banks and the disadvantage of centralization. He explained the consensus and how different nodes on a decentralized network authenticate the information and described how Blockchain is a type of DLT and the most secure tech.
At 4:02 PM, hearing ended for the day. It was a very optimistic discussion, and as expected Mr. Ashim Sood represented the Crypto ecosystem of India brilliantly with interesting and rightful points.
Day 2 – 15th January 2020
Day 2 hearing started with Mr. Ahsim Sood reading out the FATF guidelines in court at 10:58 AM. Then he read out the judgments from other countries and stated that Cryptocurrency is not recognized as legal tender. This means that doesn’t make it illegal as rumored.
In this hearing, Mr. Sood explained how bitcoin and bitcoin mining works to the judges. He stated that the opinion cannot be formed on imaginary grounds hence; there must be active an application of mind. And, if it is established that there is no material on record for forming of opinion by a regulator, the court may infer that authority has not applied its mind.
Day 3 – 16th January 2020
Hearing started at 10:58 AM, and the argument began with Mr. Sood pointing to judgment and says that a legal activity can be shut down only by a specific policy. And, if there is a risk then parliament must be first to identify that risk and not the administrative authority like RBI.
Mr. Sood stated that RBI does not have the power to “absolutely prohibit” crypto activities in India, emphasizing that taking away bank accounts constitutes absolute prohibition for crypto exchanges. As well, discussed the Financial Stability Reports
After a blazing argument Mr. Sood took the judges through the detailed comparative table about different countries, their regime nature and how they reacted to Crypto in their territories, he used an example of crypto treatment by Australia, Germany, Indonesia, Japan, etc.
And, at the end of the day, Mr. Ashim Sood concluded his argument.
Day 4 – 22nd January 2020
This hearing started at 11:07 AM, by Mr. Ahsim Sood clarifying his earlier made arguments on Financial Stability Reports.
Mr. Nakul Dewan joined in this hearing and opened his argument by giving a description of the Petitioners in his petition.
Exchanges business is completely dependent on the banking channel. If RBI cuts banking channels it directly cuts our activity. Everyone agreed that there are risks, but what could be proportionate measures. Counsel is reading out a report from his brief.
The fact was pointed out in this hearing that, even today Crypto is not banned in India. This means, there is a requirement of legal tender for anyone to enter in this crypto game. There are two major things that crypto does is that it creates the work of validation and the medium of exchange for the group of people who recognize the value in it.
The IAMAI counsel concluded that the RBI has adopted a kitchen sink approach, attempting to stop crypto activities indirectly since it has no direct control over the sector. The court is expected to resume hearing this week itself.
What do you think of the Crypto vs. RBI Supreme Court hearing?
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