India’s Supreme Court Sets Date to Debate Crypto Ban
India’s supreme court has finally relented in the face of mounting criticism after its recent decision to implement a nationwide ban on cryptocurrency, initially planned to go into effect July 6.
The highest judicial forum in India will now hold a hearing on July 20 to discuss five petitions challenging an RBI Circular issued last month making it illegal for financial institutions to provide services to companies or individuals engaged in cryptocurrencies.
Here is the chronology of events that led to the hearing in July:
Financial Institutions Jump the Gun on the Ban
Crypto Ban has Been a Disaster so far
Prior to the ban, India had been one of the fastest markets for cryptocurrency adoption. Given the country’s size and tendency towards rapid technology adoption, it was on pace to become one of the largest national crypto markets.
There is a growing sense that India’s ban on cryptocurrencies was akin to that of China’s “ban,” as both governments have also announced that they would support blockchain technology and have even considered launching their own state cryptocurrency. This double standard has led to additional criticism.
Interestingly, after the ban was announced, cryptocurrency trading experienced a spike in volume. This was likely due to the fact that both market players and exchange services were taking advantage of the three-month grace period imposed by the RBI before the new rule would be enforced.
India’s Crypto Enthusiasts Push Back
After news of the ban sunk in, India’s crypto community started to feel the pressure to push back against the regulations. A Change.org petition was started and currently has more than 45,000 signatures. The petition is titled “Make India at the forefront of Blockchain Applications revolution” and aims to facilitate dialogue between RBI, SEBI and the government.
Unsurprisingly, several prominent members of the crypto community came out against the ban. Ajeet Khurana, the CEO of India-based crypto exchange Zebpay, tweeted his intention to resist the regulatory crackdown.
No way I am stopping. We will continue to do what is best for our customers, and what is best for our country. Am studying the present situation and will react shortly. and we will emerge stronger.
— Ajeet Khurana (@AjeetK) April 5, 2018
Evan Luthra, an Indian cryptocurrency investor claims the government is actually trying to play it safe with the proposed ban.
“The government has only put a stop to conversion into fiat but they are actively promoting the technology. Even the Prime Minister is going out in public and explains the benefits of adopting the technology. In the coming days, things will get much better even on the regulatory side.”
Indian crypto investors have also received support from prominent global figures, including blockchain advocate Tim Draper, who recently took a stand against India’s refusal to accept digital currencies as legal tender by saying, “If I had a meeting with Modi, I would have let him know he is making a huge mistake.”
The supreme court hearing on July 20 may be the first of many legal battles necessary to reach an agreement that satisfies all parties.
Among the petitions received by the supreme court is one from the Internet and Mobile Association of India (IAMAI). It follows a criticism from Ahmedabad-based cryptocurrency firm Kali Digital Eco-Systems, which describes the ban as violating people’s constitutional right “to carry on any occupation, trade or business.”
During the hearing, the petitioners will have the opportunity to present their self-regulatory policies, such as anti-money laundering (AML) and know your customer (KYC).
India is one of the biggest markets in the world, making the country’s adoption of digital currencies critically important. Time will tell if India’s courts can find a balance between overregulation and complacency to prevent the proliferation of illicit activity while promoting adoption.