Reserve Bank Of India Responds To Supreme Court Crypto Ban Petitions
The Reserve Bank of India (RBI) shocked much of the cryptocurrency community around the world when they released their controversial ruling on cryptocurrency. The agency took a surprisingly hard stance against crypto, levying penalties against entities under its control doing business with cryptocurrency holders and banning its own banks from handling crypto in the vast majority of cases. The decision was a bearish sign for the Indian crypto space especially, where holders had to scramble to find ways to make use of their crypto.
On the legal side, the decision was immediately met swiftly with opposition by several groups, many of whom doubted that it was legal for the bank to openly discriminate against cryptocurrencies. Much of the complaint comes from the decision of the RBI to classify it as a security issue, consequently presupposing that those holding cryptocurrency somehow have a higher propensity to commit financial crime than those holding only fiat dollars.
Btu according to a petition filed in response by the RBI to India’s Supreme Court, none of these claims have what they call “reasonable grounds” to demand that the court overreach to reverse the decision made by the bank. This is a significant claim, considering that the petitions were so frequent against the RBI that the Supreme Court set aside an entire day to hear all of the petitions at once. But this was postponed once again, pushed back to September 25th of this year.
The IAMAI Petition
The petition that sparked this particular response from the central banking authority was one filed by the Internet and Mobile Association of India, or IAMAI. This entity is heavily involved in budding blockchain and cryptocurrency technology, and consequently filed a petition to the country’s highest court to reverse the harsh ruling of the RBI, which came earlier this year.
In response, the Reserve Bank of India submitted an official affidavit with the court on September 8th of this year. The original story came from local news site Inc42, who claims that they have both an official copy of the petition from IAMAI and the affidavit response created by RBI.
Along with the other petitioners, the IAMAI filed their petitions on the ground that the decision by the bank violates two articles of the official Indian Constitution, including Article 19(1)(g) and Article 14. Because of this violation, the petitions allege that the impacts will be severe; firms will be forced to close as a result of the radical action by the RBI.
The main thesis of the RBI affidavit is that there is no actual law-based backing to the accusations. As a consequence, the Indian Supreme Court should be forced to dismiss the charges levied in the documents immediately and entirely.
The bank argues that there exists, at this time, no official “statutory right” that would defend the ability of citizens (petitioners) to conduct business using “virtual currencies.” The court has yet to rule officially on the issue, but is scheduled to hear petitioners on the 25th of this month.