The Supreme Court of India was presented with arguments that questioned Reserve Bank of India’s [RBI] jurisdiction over contemplating a ban on crypto-activity on the basis of vagueness on August 20. The case resumed its hearing on the matter on August 21, with RBI’s counsel, Shyam Divan, listing disadvantages of cryptocurrencies as highlighted in the Inter-Ministerial Committee’s report to the court.
However, the judge questioned RBI’s concern with consumer protection as it falls on the Government’s shoulder, noted Crypto Kanoon, a website that was live-tweeting the hearing. After the counsel briefed the court about the sustainability of the banking ban citing China’s example and moved on to the draft bill, the counsel spoke about the meeting held by the committee on November 27, 2017, wherein the committee was still discussing the relevant authorities and were alert of the situation before RBI’s ban.
The judge asked for the various reports mentioned in the report by IMC, which was earlier claimed by the Government to be confidential. After the judge asked for the presence of the Solicitor General, the RBI was asked to submit all papers/reports cited on page 85 of the IMC draft bill by tomorrow, August 22.
The FATF report had laid down various pros for the use of cryptocurrencies. However, the cons could not be ignored and according to the counsel, crypto’s ability to serve as a medium for cross-border payment can “potentially undermine the monetary policy.” The counsel provided examples of online black market like Silk Road being used for illicit activities, along with the use of The Onion Router [TOR].
After highlighting concerns raised in the FATF report about crypto and the anonymity it provides, the counsel took the court’s attention towards the RBI’s counter-affidavit to IAMAI petition, where on pages 59 and 60 it highlighted various incidents of hacking on exchanges worldwide,