India’s supreme court is finally fed up with the government dragging its foot over a much anticipated policy decision on cryptocurrencies.
According to an India based lawyer, the supreme court has heard the crypto matter, but again no decision was made except the judiciary stated they will give the government four weeks to publish their crypto policy, and if it is not published, then the highest court of the land will make a decision on whether a crypto banking ban is constitutional.
As you may know, India’s central bank issued a diktat last year banning commercial banks from serving crypto exchanges, and by extension presumably crypto businesses in general.
That has been challenged as unconstitutional under the argument that the ban effectively amounts to law making, and since the central bank is not the parliament, they can’t make law.
The Supreme Court did not lift the ban in the meantime, so deferring to the central bank, but it has not yet made a decision on the underlying matter because the government intervened. That was in November 19th when they filed a counter-affidavit that said:
“Serious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India.”
They said this will be published in December, but it wasn’t. According to Quartz there’s some sort of stalemate over whether cryptos threaten Indian fiat money:
“If bitcoin and other digital currencies are going to be allowed to be used for payments then whether it will end up destabilising the fiat currency is a major concern for them (the Garg panel),” said one of the representatives from the cryptocurrency ecosystem who recently met the ministers, requesting anonymity, adding:
“The overall impact on the financial ecosystem that it is likely to have is still unclear and it has been a challenge to convince them on this particular point.”
They’re apparently happy to back blockchain tech, with the focus here being on crypto as a currency or as an asset.
What the government will decide is unclear, but we are not aware of any democratically elected government that has banned cryptos. Even in China technically there is no ban as no law has been passed to that effect as far as we are aware, but there is a banking blockade.
India’s central bank has likewise implemented a banking blockade which has led to a number of crypto exchanges shutting down or pivoting.
Here, however, it is being challenged in court as such weaponization of the banking system can have significant repercussions for liberty in the world’s biggest democracy, with the implications of a law making central bank in financial access going so far as for some to suggest it would be usurping the sovereignty of parliament, and thus of the people.