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Law Commission of India Recognizes Cryptocurrency as Means of Electronic Payment

The Law Commission of India has recognized cryptocurrency as a means of electronic payment. The pronouncement came during the Commission’s recent feasibility study of the legality of online gambling in the country. Cryptocurrency enthusiasts in India will most likely welcome this news given the negative view held by many government officials towards virtual currencies.

Law Commission Groups Cryptocurrency with Electronic Payment Channels

According to a report issued by the Law Commission:

Gambling transactions should be made cashless, making use of electronic means of payment such as credit cards, debit cards, net-banking, virtual currencies (VC, or cryptocurrency), etc.

The idea of cryptocurrencies gaining any form of recognition is one that appeals to crypto enthusiasts in the country. Commenting on the ruling, Nischal Shetty, the CEO of WazirX, a local cryptocurrency exchange platform said:

It is the first time that a body appointed by the government has given recognition to virtual currencies that they have value and can be used for a transaction. Therefore, it is a very positive sign, especially considering the report has come out after a lot of deliberation.

Presently, virtual currency regulation is a significant topic in India. The Reserve Bank of India (RBI), the country’s apex bank, has prohibited local banks from facilitating cryptocurrency transactions in the country. This situation has led to a public outcry with multiple suits filed to challenge the RBI ban.

The Supreme court after having heard preliminary arguments on the case recently fixed September 11, 2018, as the date for delivering its decision on the matter.

Regulation is Better than Prohibition

The ruling offered by the Law Commission of India throws into sharp relief an important debate of which is more desirable – regulation or prohibition. The Commission’s mandate was the examine the case for legalizing betting while treating match-fixing as a criminal offense.

The same principle could also be applied to the government’s stance on cryptocurrency and the RBI ban. Commenting on this analogy, Tuhina Joshi, an associate at TRA Law, a firm with many cryptocurrency exchange platform clients, said:

The law commission recommends that regulating gambling is preferable to an outright ban. This is the same argument we are making in [the] context of cryptocurrencies.

Do you think the ruling of the Indian law commission will lead to a reversal of the RBI ban? Let us know your thoughts in the comment section below.

Image courtesy of the Law Commission of India

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India’s Supreme Court Upholds RBI Ban, Final Arguments To be Heard in September

Today was the proverbial D-Day for the cryptocurrency industry in India as the Supreme Court was scheduled to hear the case against the Reserve Bank of India (RBI) instituting a ban forbidding all commercial banks in the country from facilitating crypto related transactions. The RBI ban also forbade all other regulated financial institutions from providing the said services. However, all crypto-to-crypto transactions were not affected by the ban.

The petition to reverse the ban was forwarded to Chief Justice Dipak Misra and Justices A.M Khanwilkar and D.Y Chandrachud. The country’s Attorney General was also present representing the government of India, further signifying the severity of the matter.

However, the court witnessed limited arguments brought forward by the lawyers representing the Internet and Mobile Association of India (IAMAI) which considers domestic crypto exchanges as part of its fraternity. There was also lack of concrete opinion from other prominent authorities during the hearing thereby forcing the Supreme Court to defer the date of the hearing to September 11th this year.

These events were further reported by Crypto Kanoon which is the local source of crypto and blockchain related news. Crypto Kanoon reported the following in a tweet after the decision to postpone the hearing was made:

Crypto Kanoon would also add that the SEBI (Securities and Exchange Board of India) and few other remaining parties had not filed their responses to the petition seeking regulation. All parties were given 4 weeks to file their replies with the court.

The CEO of the Pocketbits crypto exchange had this to say with regards to the outcome of today’s hearing:

Final hearing [is] slated for 11th of September. Now that is the Judgement Day.

According to sources familiar with the case, the RBI is being challenged through two aspects of the Indian constitution. The first being that all citizens of the country have the right to carry out any occupation, trade or business. The second is that the constitution also prohibits discrimination and mandates equal protection under the law of the country.

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