banning

RBI Governor Discusses Crypto and Central Bank Digital Currency

05/12/2019 by Idelto Editor

The governor of the Reserve Bank of India (RBI), Shaktikanta Das, spoke about cryptocurrency during a press conference on Thursday. He also talked about the prospect of an RBI-issued digital currency, when the time will be right for issuing one, and his view on private digital currencies.

Also read: Indian Supreme Court Wraps up Crypto Hearing for the Year

RBI Governor’s View on Cryptocurrency

RBI Governor Shaktikanta Das reportedly talked about cryptocurrency and central bank digital currency (CBDC) on Thursday at a customary post-policy press conference. The governor “made it clear that the RBI is completely against private digital currency, asserting the sovereign’s right over this function,” PTI reported. Das was quoted as saying:

The world over, central banks and the governments are against private digital currency because currency issuance is a sovereign function and it has to be done by the sovereign.

The RBI has never been friendly to cryptocurrency. In April last year, the central bank banned financial institutions from providing services to crypto businesses including exchanges, forcing some of them out of business. The ban went into effect three months later. A number of crypto industry stakeholders filed writ petitions with the supreme court challenging the ban but the case is still ongoing. The court is scheduled to resume hearing the case on Jan. 14, 2020.

Das’ statements also echo the bill drafted by the interministerial committee (IMC) tasked with studying all aspects of cryptocurrency and providing recommendations. The committee, headed by former Secretary of the Department of Economic Affairs Subhash Chandra Garg, submitted the draft bill entitled “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” to the Ministry of Finance in February. After it was made public in July, Garg tweeted: “Private cryptocurrencies are of no real value. Rightly banned.”

When RBI Will Issue Digital Currency

Regarding whether the RBI is looking into issuing a central bank digital currency, Governor Das said on Thursday that “It is very early to speak on a central bank issuing digital currencies,” PTI further reported. “Some discussions are going on. Technology has not fully evolved yet. It is still in very incipient stage of discussions and at RBI we have examined it internally,” Das revealed, elaborating:

As and when the technology evolves with adequate safeguards, I think it is an area where the Reserve Bank will certainly look at seriously at an appropriate time.

The draft bill to ban cryptocurrency has a section on central bank digital currency and its proposed legal framework. The IMC is of the view that “it would be advisable to have an open mind regarding the introduction of an official digital currency in India,” its report reads.

The bill defines digital rupees as “a form of currency issued digitally by the Reserve Bank and approved by the central government to be legal tender.” The IMC has recommended that the government, “in consultation with the Central Board of the Reserve Bank, may approve [the] digital rupee to be legal tender with effect from such date and to such extent as may be specified.” In 2017, there were reports of the Indian government considering issuing state-run digital currency called Lakshmi.

The Indian government told the supreme court in August that it planned to introduce the aforementioned bill in the Winter session of parliament but it ended up not being on the agenda. Meanwhile, the crypto community in India strongly believes that the bill is flawed and has been campaigning to convince the government to reevaluate the bill and the IMC’s ban recommendations. In October, Das and Finance Minister Nirmala Sitharaman answered some questions regarding cryptocurrency, stablecoins, and Facebook’s Libra at an IMF and World Bank meeting.

What do you think of the RBI governor’s view on cryptocurrency? Let us know in the comments section below.

Images courtesy of Shutterstock and CNN.

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BCH Microblog ‘Member’ Shows the Future of Reddit-Like Forums

16/09/2019 by Idelto Editor

BCH-Based Microblog Member Shows the Future of Reddit-Like Forums

Since the Bitcoin Cash upgrade in May 2018, software developers have unleashed a slew of microblogging protocols that utilize OP_return transactions. One application called Member is a BCH-based browser that makes use of these types of transactions and the extra space added to the data carrier size. While still in its infancy, the Member platform has matured into a censorship-resistant Reddit but with geolocated posts, reputational ratings, and native BCH tipping.

Also Read: At Least 19 Central Banks Give Way to Monetary Easing As Economy Slows

The Member Client Continues to Grow

Years ago, Reddit was an interesting online place that allowed many groups to connect, share news and content, and discuss in a forum-like atmosphere. These days, Reddit is synonymous with mass censorship and deplatforming as the corporate entity has banned a variety of subreddits this year. The crypto community caught wind of Reddit censorship last year when the company removed the subreddit /r/darknetmarkets. Reddit users can’t even trust the company’s founder and CEO Steve Huffman who was forced to apologize when he got caught altering pro-Trump related thread comments.

BCH Microblog 'Member' Shows the Future of Reddit-Like Forums — Reddit censorship has increased significantly in recent years.

Bitcoin supporters have seen severe forms of censorship on the subreddit /r/bitcoin as the owner and moderator Theymos and his minions deleted thousands of comments from visitors and suppressed the conversation during the block size debate. Last May, a former moderator who worked alongside Theymos told Bitcoin.com’s podcast host Matt Aaron how he was removed from the group of administrators after he failed to toe the line. Censorship like this has driven the BCH community to foster censorship-resistant microblogging communities like Memo. In tandem with Memo, another application called Member could push the Reddit-like forum concept to new heights using the BCH chain.

Member has been around for some time now but the application has matured a great deal since news.Bitcoin.com reported on it last year. The application’s creator, a developer called Freetrade, describes the platform on Github, calling it a BCH blockchain browser. “It reads and allows users to create actions in the Memo/Member protocol — The client is an HTML5/JS BCH blockchain browser app with no outside js dependencies and it can be run from a website, or from a local file system,” Freetrade’s Github repo details. “Currently it connects to the Member server to get content, and uses Bitbox to get utxos and broadcast transactions.”

Getting Acquainted With the Member App

In order to use Member, you need to have an account with the social network and microblogging app memo.cash where all posts are permanently recorded to the Bitcoin Cash chain. You can sign up for Memo here and it’s a good idea to fund your Memo wallet with a small fraction of BCH so you can post on memo.cash and the Member platform as well. To access Member, go to the website and press the “Login” tab at the top right side of the screen. You can also sign up directly from the Member Login page by pressing the “Create New Account” tab.

Member will tell you to connect your wallet address to get started so you can post. After pressing “Ok,” Member will direct you to a page that shows your new BCH address so you can send a small fraction of funds. If you already have an account or started by signing up for memo.cash using the link mentioned above then Member asks you to paste your Memo private key (compressed WIF format, starts with ‘L’ or ‘K’) into the Login window. After these steps are complete, you are free to explore the Member app but also to create posts, upvote, tip people BCH, and initiate a geolocated post.

To create a new post on Member, simply press the “New post” tab on the upper left side of the user interface. The platform will open a window that allows you to customize a new post with a title and text. You can also post a memorandum or post directly to the memo.cash feed. After creating a post, other Member users can reply to the thread just like a traditional Reddit post and they can “like” the post as well. Moreover, you can be tipped bitcoin cash as Member offers a native BCH wallet that allows for tipping users. If you observe Member’s main feed, it’s set up similarly to the front page of Reddit and there’s a large variety of threads and discussions hosted on the feed. Additionally, you can check the most recent posts on the Member feed by pressing the “Posts (new)” tab on the upper left side of the screen.

Geolocated Posts, 2,000 Characters, and a Reputation System

You can also tether your location coordinates to a custom message using the Member app. At the top left side of the screen simply press the “Map” tab and the website will take you to a map of the world. Like a traditional geolocation map, your browser will ask you if you want to give the Member map your location coordinates so you can get a visual look at your area. The choice is optional but if you do, you can tie a special message to your location that’s written on the BCH chain. Essentially you or anyone can tether a message to any location in the world for less than a U.S. penny at any time. Just click the map with your mouse pointer to select the message location, write it and post it to the Member map. After a few minutes of exploring the Member app’s features, the platform is relatively easy to understand and use.

Member’s creator Freetrade has been hard at work adding more services to the application like reputational ratings and increased character limits for messages. The software engineer recently made it so Member users can reply with much longer character limits. “Member now allows 2,000 character replies by chaining transactions together — Member also treats topics more like subreddits,” Freetrade told BCH supporters on September 15. This announcement got the /r/btc community on Reddit pumped due to their intolerance of censorship. “Wow, now we’re talking,” a BCH proponent opined after Freetrade revealed the 2,000 character extension. “Reddit is slowly dying because of censorship and abuse from admins — If we could create a decentralized alternative on BCH that would be huge,” he added. In addition to the character extension, Freetrade has introduced a web of trust infrastructure to the Member platform. The new idea allows you to rate other Memo profiles using the Member app by giving them a public trust rating. Freetrade has shown that as the reputation system matures, robust trust graphs could be created.

There’s been a lot of development within the BCH ecosystem and Member’s improvements have bolstered a microblogging and censorship-resistant Reddit-like experience. As with most peer-to-peer and decentralized blockchain applications, Member needs to gather more users over time. Memo and Member have seen a lot of lively users since they were created and both have grown a great deal. While projects like Blockpress have fallen to the wayside and are now defunct, the Memo and Member apps have remained strong after the long crypto winter and the blockchain split in November 2018. One difference between the two clients is the Memo protocol browses both BCH and BSV blockchains but the Member app only browses the BCH chain. Freetrade continues to work on making the Member client more robust and has put together a list of certain elements of the project he could use help with.

What do you think about the Member client? Let us know what you think about this project in the comments section below.

Image credits: Shutterstock, Member, and Pixabay.

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Indian Government’s New Report Views Crypto Positively

04/09/2019 by Idelto Editor

A new Indian government report has put cryptocurrency in a positive light, viewing the mechanisms surrounding it, including initial coin offerings, as “revolutionizing the global fintech landscape.” The report also discusses the regulation of coins and tokens.

Also read: Indian Exchanges Innovate as Calls for Positive Crypto Regulation Escalate

Steering Committee’s Report

The Indian Ministry of Finance announced Monday that the Steering Committee on Fintech-Related Issues has submitted its final report to the finance minister. The committee was constituted by the Department of Economic Affairs (DEA) under the chairmanship of Subhash Chandra Garg who was the DEA Secretary at the time. He has since been reassigned to the Power Ministry. The 150-page report includes a section on digital currencies and tokens.

The committee described in its report that the “Use of digital tokens resolves the issue of multiple currencies, improves liquidity and capital compliance costs, allows for micro-payments and expedites the payment process, which further eliminates liquidity risks,” elaborating:

The mechanisms surrounding cryptocurrencies, particularly the blockchain and initial coin offerings (ICOs), are revolutionizing the global fintech landscape.

The report details how ICOs work and emphasizes that token issuance “has emerged as an innovative way of capital raising by fintech businesses,” citing that 790 ICOs had been issued as of Sept. 25, 2018, raising a total of $20 billion. This year, the total amount of funds raised globally in ICOs so far is over $346 million, according to token sale tracking website ICOdata.

The mandate of this committee “was to take stock of developments in the fintech space globally and in India, study the regulatory climate in various geographies, identify application areas and use cases in governance and financial services, [and] suggest institutional regulatory upgrades enabling fintech innovations,” Garg described.

Committee That Drafted Crypto Bill

Another committee under the chairmanship of Garg was the interministerial committee (IMC) tasked with studying all aspects of cryptocurrencies and providing recommendations. Constituted on Nov. 2, 2017, the IMC met three times before submitting its report and draft bill entitled “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” to the finance minister. The report and bill are both dated Feb. 28, but were made public on July 22.

Besides Garg, the IMC report was signed by the secretary of the Ministry of Electronics and Information Technology, the chairman of the Securities and Exchange Board of India, and the deputy governor of the Reserve Bank of India (RBI). All of them are also members of the Steering Committee, along with a number of other government officials, the CEO of the Unique Identification Authority of India, and the CEO of Invest India. In addition, 31 industry participants are listed in the report, including the National Association of Software and Services Companies (Nasscom), the Internet and Mobile Association of India (IAMAI), Paypal, Mastercard, Facebook, and several banks such as RBL Bank, State Bank of India, and Yes Bank.

Since the public release of the IMC report and draft bill, the Indian crypto community has been campaigning to convince the government that the recommendations are flawed. Nasscom and IAMAI have also voiced their concerns regarding the bill to ban cryptocurrencies as they believe that banning is not the solution. IAMAI has also filed a writ petition with the supreme court challenging the banking ban by the RBI.

Regulation of Cryptocurrencies

The Steering Committee report suggests that tokens can be grouped into two categories depending on the objective of their issue. The first category is utility tokens, which “entitle future access to a company’s product or service,” the report reads. This type of token includes digital coupons, such as those a hotel or other service providers would issue.

The second category is security tokens. The report notes that some token issuance has the attribute of a security, referencing the U.S. SEC vs. Howey court case which established the guidelines for determining if an offering constitutes a security. The report briefly explained how the Howey test works, stating that four criteria must be satisfied. Particularly, there must be an investment of money and an expectation of profits. The investment of money must be in a common enterprise and any profit must come from the efforts of a promoter or third party. According to the report:

The regulation of coins or tokens depends on the characteristics and the purpose for which they are being issued.

While the above classification is mentioned in the IMC report, it is not part of the bill which seeks to ban all “private cryptocurrencies,” except state-issued ones. Instead of defining tokens as security or utility, the bill simply defines cryptocurrency as “any information or code or number or token not being part of any official digital currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchanged with or without consideration, with the promise or representation of having inherent value in any business activity…”

In its report, the IMC acknowledged that it “recognizes that technological innovations, including those underlying virtual currencies /crypto tokens, have the potential to improve the efficiency and inclusiveness of the financial system.” Nonetheless, it still recommends “a law banning the cryptocurrencies in India and criminalizing carrying on of any activities connected with cryptocurrencies in India.”

Last month, the central bank published its final fintech regulatory sandbox framework. Among the types of businesses, projects, and services that may not participate are those involving cryptocurrency; crypto-asset services; trading, investing, and settling in crypto assets; ICOs; and any products or services which have been banned by the government of India. Meanwhile, the Indian supreme court is scheduled to hear the case relating to India’s crypto policies in January next year, after postponing it at the request of the government in July. The government told the supreme court that it may introduce the bill on cryptocurrency in the next parliament session.

What do you think of the Steering Committee’s report? Do you think the Indian government will abolish the bill to ban cryptocurrencies and introduce positive regulation instead? Let us know in the comments section below.

Images courtesy of Shutterstock and the Indian Ministry of Finance.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Crypto Can Boost Indian Economy – How Banning Will Hurt it

29/08/2019 by Idelto Editor

Crypto Can Boost the Indian Economy - How Banning Will Hurt it

The Indian economy is experiencing severe economic slowdown not seen in many years, and cryptocurrency can potentially help. However, the government is considering a draft bill to ban cryptocurrencies, which could have undesirable consequences on the economy. Meanwhile, the Indian crypto community has already been enduring a banking ban by the central bank.

Also read: Indian Supreme Court Orders RBI to Answer Crypto Exchanges, New Date Set

Job Growth Amid ‘Unprecedented’ Economic Slowdown

Rajiv Kumar, the vice-chairman of Indian policy think tank Niti Aayog, said last week that the Indian government is facing “an unprecedented situation.” He explained that “In the last 70 years, nobody had faced this sort of situation where the entire financial system is under threat.” According to Reuters, economists predicted earlier this week that, in the second quarter of this year, the Indian economy likely expanded at its slowest pace in more than five years.

The slowdown has led to many job losses in a number of sectors, particularly the auto industry. Chief Minister of the Indian state of Rajasthan, Ashok Gehlot, informed the press last week that almost all sectors in the country are struggling, with lakhs (100,000s) of people losing their jobs. Parliament Member Manish Tewari, a spokesperson for India’s Congress political party, estimated that over three crore (30 million) people are facing the threat of becoming unemployed.

Nischal Shetty, CEO of crypto exchange Wazirx, believes that job growth is among the major benefits crypto can help his country’s economic situation. Kunal Barchha, cofounder of the crypto exchange Coinrecoil, shares the sentiment. He told news.Bitcoin.com:

Indirectly, crypto can help create awesome applications that can contribute to good business and that can boost the overall IT industry of India and add new jobs for the young generation.

According to job search site Indeed, the crypto and blockchain market is still “rapidly growing.” The company found that the share of U.S. job postings related to crypto, blockchain and bitcoin has grown 90% over a one-year period ending February. Earlier this year, the company revealed that Bengaluru was the number one city in India for crypto jobs, followed by Pune, the second-largest city in the Indian state of Maharashtra.

Wealth Creation and Helping the Unbanked

Besides job creation, there are other benefits crypto can offer the Indian economy. Among them is attracting “new foreign venture capital investments into Indian startups,” Shetty detailed, telling news.Bitcoin.com that “ICOs can be a new global fundraising mechanism for early-stage Indian startup.” According to ICOdata, the total amount of funds raised globally in ICOs so far this year is over $346 million.

The Waxirx CEO added that cryptocurrency can help make remittances in India “cheaper and faster.” Data from Trading Economics shows that remittances in India stood at $12.6 billion in the first quarter. He also believes that cryptocurrency can offer the “Opportunity to bank the massive 300M+ unbanked people in India.” The Indian government’s own data shows that, as of Feb. 13, the number of accounts opened under the PMJDY, the government-run financial inclusion program, was 34.43 crores.

Barchha, however, has doubts about how much cryptocurrency can help the Indian economy. He argued that “most of the people around the world still understand crypto as money for illegal activities,” so “It is a distant dream to see crypto helping [the] vast size of Indian economy.” He opined, “I personally don’t see crypto playing any leadership role in the Indian economy, not in coming 5 years at least.”

Negative Effects of Banning Crypto

Currently, the Indian government is deliberating on a draft bill to ban cryptocurrencies. It was drafted by an interministerial committee (IMC) headed by former Secretary of the Department of Economic Affairs Subhash Chandra Garg, who was recently reassigned to the Power Ministry. The committee was constituted on Nov. 2, 2017, and only met three times before finalizing this bill. However, the community is confident that the bill is flawed and has been tirelessly campaigning to convince lawmakers to reexamine the IMC recommendations.

Shetty shared with news.Bitcoin.com the short term and long term effects of banning cryptocurrencies in India. In the long run, he explained that “India will see a massive brain drain,” as skilled citizens move out of the country to seek opportunities elsewhere. Bahrain, for example, has already been courting Indian startups to set up shop there, marketing itself as a crypto-friendly country.

If the government decides to ban cryptocurrency, “India will not have blockchain and crypto expertise leading to no crypto-related work reaching India,” the Wazirx executive pointed out, emphasizing that the country stands to “lose billions of dollars worth of investment that the crypto sector can potentially attract.” Consequently, “Hundreds of jobs will be lost,” he indicated, elaborating:

Indian citizens will lose hundreds and thousands of crores of their hard earned money … India will lose out on thousands of jobs that would otherwise be generated if the crypto sector was to be positively regulated.

Hurting Legitimate Players

Whether done in fiat currency or cryptocurrency, “Illegal activities, money laundering, and terrorist financing are the top concerns for the government of India,” Barchha asserted. “As of now, every exchange allows trading after verifying documents rigorously,” he described, affirming that “A ban will result in [the] closure of all exchanges and that will result in no accountability of transactions.” He further conveyed that “People with illicit intentions are … going to deal in crypto using their own network,” elaborating:

Indirectly, the government of India will increase their headache of tracing illegal transactions, which would have been easier if strict KYC based exchanges are regulated.

On the other hand, he opined: “honest traders or investors won’t give up their faith on the technology and they will trade in cash through peer-to-peer portals. They won’t be paying any taxes for these transactions, which is an additional loss for the government.”

Recently, The Indian National Association of Software and Services Companies (Nasscom) voiced its concerns regarding the proposed banning of crypto assets in India. The association describes itself as “the apex body for the 154 billion dollar IT BPM industry in India,” which “Liaisons with government and industry to influence a favourable policy framework.” Nasscom stated that “A ban would inhibit new applications and solutions from being deployed and would discourage tech startups” and would also “handicap India from participating in new use cases that cryptocurrencies nad tokens offer,” emphasizing:

A ban is more likely to deter only the legitimate operators as they have no intent to be non-compliant.

In his open letter to the Indian finance minister, Sohail Merchant, CEO of local crypto exchange Pocketbits, wrote: “If the ban comes into effect, the black market will continue to thrive. It will be the common man, compliant businesses, and innovators building upon these protocols that will be affected.”

Supreme Court Hearing, One Petition Withdrawn

There is already a banking ban in place in India, imposed by the Reserve Bank of India (RBI) in its circular issued in April last year. The ban went into effect 90 days later. A number of industry participants filed writ petitions challenging the ban, which the Indian supreme court was originally set to hear in September last year but was continually delayed. The wait has caused a few operators to shut down their local exchange operations, including Zebpay, formerly one of the largest crypto exchanges in India, Coindelta, Coinome, Koinex, and Cryptokart.

During the Aug. 21 hearing, the supreme court instructed the central bank to answer the representation by crypto exchanges. Shetty told news.Bitcoin.com that the document was submitted by the Internet and Mobile Association of India (IAMAI) sometime last year. “It’s basically a set of suggestions that IAMAI had sent to the RBI. Stuff like exchanges following KYC and AML policies etc,” he clarified. “The objective was to put across the fact that there are better ways to ensure investor protection and prevent malicious activities in crypto.”

Coinrecoil, the first company to challenge the RBI ban in court, has recently withdrawn its writ petition. “Yes, we did withdraw our petition last week,” Barchha confirmed. “Even though being a startup, we decided to take the risk and became the first exchange in the country to file the petition. We tried our best to stay till the end of the fight. But regardless of our passion or confidence, at some point, money matters.”

According to Barchha, the financial burden was the only reason for his startup with limited funds to withdraw its petition. “Most of the investment was done by three directors, friends, and family. That was enough to build the exchange from scratch, and make it operational for 4 months. The banking ban was a blow to our financial planning,” he detailed.

Do you think crypto could help boost the Indian economy? Would banning it have the opposite effect? Let us know in the comments section below.

Images courtesy of Shutterstock.

The post Crypto Can Boost Indian Economy – How Banning Will Hurt it appeared first on Bitcoin News.

RBI Defends Its Power Over Crypto in Indian Supreme Court

20/08/2019 by Idelto Editor

The Indian supreme court heard the case against the crypto banking restriction by the Reserve Bank of India (RBI) in detail Tuesday. After many arguments challenging the RBI’s power over crypto were presented, the counsel for the central bank began making the case against cryptocurrency.

Also read: RBI’s Power Over Crypto Challenged at Length in Indian Supreme Court

Today’s Hearing

The Supreme Court of India resumed hearing the crypto case extensively on Aug. 20, after hearing it in-depth twice over the past two weeks. Advocate Ashim Sood, counsel for the Internet and Mobile Association of India (IAMAI), continued his arguments against the banking restriction by the central bank, Indian news and analysis platform Crypto Kanoon reported from the courtroom.

Sood brought up the crypto law passed in the U.S. state of Wyoming, the guidelines adopted by the state of New York, and the Howey test used by the U.S. Securities and Exchange Commission (SEC) to determine whether a token sale is a security offering, Crypto Kanoon detailed. Sood went on to discuss the crypto regulatory approaches taken by the G20 countries, as well as the guidance issued by the Financial Action Task Force (FATF) to combat the illicit use of crypto assets.

The counsel proceeded to point out that the central bank’s claim that the effect of cryptocurrency on the Indian economy is negligible is not based on any study the RBI has conducted. Several past judgments were read out to the court before the counsel concluded his arguments.

Senior Advocate Nakul Dewan then began arguing on behalf of exchanges, starting with a brief history of cryptocurrency, Crypto Kanoon conveyed. Dewan proceeded to talk about RBI’s concerns, types of cryptocurrencies, and the advantages of blockchain technology in the banking and financial sectors. He also read out some parts of the interministerial committee (IMC) report. The IMC was constituted on Nov. 2, 2017, to study all aspects of cryptocurrencies and provide recommendations.

The hearing continued after a lunch break with many more arguments against the ban, Crypto Kanoon further reported. The counsel asserted that the RBI should put crypto under a framework to ensure compliance instead of banning, noting that the central bank had recognized that the crypto industry needs to be monitored to avoid tax evasion, AML risks, and a shift to the dark web. He further argued that the money deposited in a bank belongs to the depositors, not the RBI or the bank which is only a custodian of the deposited money.

The court then heard from Senior Advocate Shyam Diwan who argued on behalf of the RBI. Noting that cryptocurrency is a means of payment, he claims that it has a direct impact on the country’s monetary and payment systems, particularly if more people continue to use it for this purpose. Further, its use for cross-border transactions is also a problem for the central bank, Crypto Kanoon conveyed. The RBI counsel read the budget speech by former Finance Minister Arun Jaitley and cited various hacking incidents worldwide including one at Indian exchange Coinsecure. Before the court adjourned, Diwan argued that bitcoin and other cryptocurrencies are Ponzi schemes, noting their price bubbles and the large consumption of electricity used in mining. The hearing will resume tomorrow.

Two Previous Hearings

Prior to Tuesday’s hearing, the Indian supreme court partially heard the crypto case on Aug. 8 and Aug. 14. On both days, Sood argued against the banking ban by the central bank, which issued a circular in April last year banning financial institutions from providing services to crypto businesses. The ban went into effect 90 days later, forcing a number of crypto businesses to shut down due to the lack of banking support.

Sood challenged the RBI’s power to exert such a ban, arguing that the aforementioned circular is not valid under statutes such as the RBI Act and the Banking Regulation Act. “RBI cannot step out of its powers as set out in [the] Banking Regulation Act. Therefore, its action against private businesses in the form of a circular is illegal,” the counsel was quoted by The Economic Times as saying.

After giving several reasons to invalidate the RBI ban, Sood began educating the judge on the basics of cryptocurrency and how major countries, including the G20 nations, regulate crypto assets. The hearing adjourned on Aug. 14 after the regulatory framework for cryptocurrency adopted by the state of New York was discussed.

Indian Crypto Regulation to Be Examined in January

As for the writ petitions concerning India’s crypto regulation, the supreme court is set to hear them at the end of January. On Aug. 8, the Indian government asked the court to postpone hearing these petitions until it has introduced a bill on cryptocurrency, which may be during the next parliament session in November and December. The court agreed and moved the hearing to the end of January 2020.

The Indian government is currently deliberating on a cryptocurrency bill submitted by the aforementioned IMC. The committee was headed by former Secretary of the Department of Economic Affairs (DEA) Subhash Chandra Garg, who was recently removed from his DEA position and appointed to the Power Ministry. He subsequently applied for voluntary retirement.

A week before Garg’s removal, the IMC report containing a draft crypto bill was made public. The bill entitled Banning of Cryptocurrency & Regulation of Official Digital Currency seeks to ban all cryptocurrencies except state-issued ones.

Following the public release of the IMC report, an increasing number of crypto industry participants have voiced their concerns regarding how flawed the report and bill are, calling for lawmakers to re-examine the IMC recommendations. The Indian crypto community, along with large trade associations such as the IAMAI and the National Association of Software and Services Companies (Nasscom), have repeatedly said that banning is not a solution.

What do you think of the Indian supreme court hearing today? Let us know in the comments section below.

Images courtesy of Shutterstock and The Financial Express.

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