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The Internet and Mobile Association of India (IAMAI) told the Supreme Court on Thursday that the Reserve Bank of India (RBI) should have regulated the use and exchange of cryptocurrency instead of banning it.
The ban imposed on the Banks from dealing in cryptocurrency by the RBI was a “moral ban” and was not backed by any study to show the adverse effect of cryptocurrency, submitted the petitioner body represented by Advocate Ashim Sood.
While making his case against the ban on this virtual “currency”, Sood argued that cryptocurrency is not an actual currency but in common parlance, it is called so. Cryptocurrency, such as bitcoins, is in fact a commodity, Sood argued, which has a value that is ascribed to it.
Comparing cryptocurrency with diamonds and casino chips, Sood said that these items have corresponding values given to them by the users and cannot be called as actual currency.
It was also submitted that the integrity of the Blockchain technology, of which cryptocurrency is a part, is not under question and therefore a complete ban ought not to have been imposed. Further, it was submitted that the ban was imposed by the Central Bank without having conducted a study and the same was admitted to by the RBI in response to a Right to Information (RTI) application filed in that regard.
The Bench of Justices Rohinton Nariman and Surya Kant has asked the petitioner body to submit a chart with details pertaining to all the countries and judgments by Courts of other countries where regulation of cryptocurrency was favoured over the imposition of a complete ban.
The arguments in this batch of petitions challenging the RBI’s April 6, 2018 circular will continue next week.
On April 6 in 2018, the RBI passed a Circular disallowing regulated bodies and entities from dealing in virtual currency or cryptocurrency. This Circular also banned regulated entities from offering services to those who deal in cryptocurrency. The deadline for adhering to this Circular and winding up all cryptocurrency dealings was set for three months from the date the order was passed.
Various petitioners had moved the Supreme Court challenging this circular and had sought a stay on its implementation. While the court had agreed to hear the matter, no stay on the circular was granted.