There may be a lull in activity in the cryptocurrency market this Tuesday, but certainly not in India where a legal case between the Internet and Mobile Association of India (IAMAI) as plaintiff and the Reserve Bank of India (RBI) as defendant is ongoing at the Supreme Court. This is a case that may have some implications on crypto regulation going forward.
IAMAI is suing the RBI to gain the right to have cryptocurrency ownership and trading legalized in the country, asserting that the Reserve Bank of India’s crypto ban was not based on the “doctrine of proportionality”. IAMAI’s lawyers have cited the application of the Howey Test by the US Securities and Exchange Commission in determination whether cryptos are investment contracts, and the Directive of the European Parliament as instances where standardized regulatory requirements for participants in the cryptocurrency industry have been developed and used successfully in the respective regions. Reference was also made to the state of Wyoming in the US, where blockchain laws have been passed to give legal credence to the technology behind cryptos, and where mechanisms for regulation of crypto assets and exchanges have been developed.
Lawyers for the RBI argue that allowing decentralized mechanisms of payment such as cryptocurrencies will have adverse effects on the existing fiat-based payment systems. They also cited the use of cryptos for unmonitored cross-border transactions as a potential hazard for the RBI’s functions. Concerns about unusually high electricity consumption of unregulated crypto mining operations were also raised by the RBI’s legal team.
Hearing in this case continues tomorrow. It is still not known when judgment will be passed by the Indian apex court.Don’t miss a beat! Follow us on Telegram and Twitter.