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ANALYSIS: RBI vs. Crypto Hearings End; Verdict Pending

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As the long and intense legal battle between RBI and Crypto comes to an end, both sides have presented their arguments and await a judgment as to whether RBI’s directive banning banks from dealing with cryptocurrencies was warranted and valid.

Counsel for IAMAI, Ashim Sood, has made a strong case in favor of Crypto freedom in India. He argued that the RBI did not sufficiently prove that VCs had a detrimental impact on the economy. Hence, their preemptive action was not justified.

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Sood argued that RBI’s directive failed to address any of the concerns they had regarding cryptocurrencies – especially money laundering and terrorist financing. In fact, their decision to ban banks from dealing in crypto seemed to be taken out of fear of and unfamiliarity with new tech.

WazirX CEO, Nischal Shetty, supported this argument:

Sood added that the directive only served to impact the business of crypto exchanges without affecting the ability of traders to conduct crypto-based transactions.

The Counsel further reiterated that rather than banning an entire channel, the RBI, as well as the legislature, must strive to understand the advantages and disadvantages of digital currencies and hence work towards drafting a regulation to control it effectively.

Sood presented a strong case and was applauded for his efforts by the Supreme Court justices, counsel representing a number of crypto exchanges, Mr. Nakul Dewan, as well as India’s crypto community at large.

On the other hand, RBI counsel maintained that as an expert body charged with protecting India’s monetary policy and sustaining a stable economy, the decision to ringfence cryptocurrencies was absolutely under their domain.

During the course of the hearings, the judges expressed an interest in the merits of cryptocurrencies and sought to understand regulations governing crypto in other countries. In addition to this, Sood’s heated arguments and valid points regarding the limitations of RBI’s authority to take preemptive action in banning a banking channel entirely, indicate that the verdict may tilt in favor of Crypto freedom in India.

Mahima Duggal

Mahima Duggal has completed her MA in International Security from the University of Warwick (UK) with distinction. She also holds a BSc (2:1 Honours) in International Relations from the London School of Economics and Political Science (LSE). She is a trained journalist who has completed an undergraduate degree in journalism and public relations from the University of Newcastle in Australia. Mahima's research interests involve technology, cyber security, human rights and international development. She follows all things crypto and strongly promotes the use of blockchain technology for social change.

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