The Reserve Bank of India (RBI), the central bank of the country, has told the supreme court that the institution’s decision to prohibit crypto trading should not be challenged by local businesses.
In an affidavit filed with the supreme court of India, RBI stated:
“The impugned circular and the impugned statement neither violate the right to equality guaranteed under Article 14 or the right to trade and business guaranteed under Article 19 of the Constitution…The petitioner cannot seek to exercise the extraordinary jurisdiction of this Honorable Court to avail a right which they do not have. The impugned circular and the impugned statement have been issued in a manner that is consistent with the powers conferred on the RBI by the law and the same are legal and valid.”
Timing of the Central Bank’s Statement
According to the affidavit, the RBI claimed that it has prohibited crypto trading in a lawful way that does not violate any of the country’s existing regulations. Hence, the supreme court should not even consider evaluating the petitions submitted by crypto-related businesses and investors in the market of India.
The RBI emphasized that petitions against the imposition of a ban on crypto trading are not maintainable and that they should be dismissed, due to the lack of reasonable arguments made by associations including the Internet and Mobile Association of India, a non-profit organization that expands and enhances the online and mobile value added services sectors.
While the RBI’s statement is accurate in that it has imposed a ban on a new asset class within its power in a legal and lawful manner, it is also legal for businesses and associations to file petitions with the supreme court to challenge decisions made by government bodies and agencies.
If the RBI remains confident in its decision to impose a ban on crypto trading and is able to clearly justify it, then it should not feel the need to interfere with the country’s petition system. Even at a supreme court level, parties can file a review petition to challenge the decision of the supreme court.
As such, it is legal and valid, based on the laws of India, for associations to file petitions to challenge the decisions of authorities and the RBI’s affidavit has dismissed the right of businesses and associations to file petitions against the country’s central bank.
The aggressive approach of the RBI towards maintaining its ban on crypto trading comes in a time in which the Securities and Exchange Board of India (SEBI) has sent authorities to Japan, UK and Switzerland to study their regulatory frameworks around cryptocurrency exchanges and trading.
In early September, the RBI already told the supreme court that the current legal system cannot acknowledge and recognize Bitcoin as a currency. Yet, without providing the supreme court sufficient time to digest and evaluate the situation, the RBI has come out with another affidavit to protect its decision.
RBI is Concerned
In a span of one month, the RBI has asked the supreme court to dismiss petitions without a proper review process and emphasized that Bitcoin as a currency cannot be recognized in the country, which suggests that the RBI is concerned regarding the relatively high probability of the supreme court to reverse the decision of the RBI to ban crypto trading.
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Last modified: March 4, 2021 3:43 PM