Digital Currencies are Not ‘Currencies,’ Argues Indian Crypto Lawyer

After months of delays, the Indian Supreme Court has finally started hearing arguments on the petitions of crypto businesses against the central bank ban on banking support to the industry.

In the three-day hearing, the crypto lawyer presented some strong arguments to the court, raising questions on the Reserve Bank of India’s (RBI) scope to ban digital currencies.

Asim Sood, the advocate representing crypto companies, argued that, despite the nomenclature, Cryptocurrencies are actually “currencies.”

Explained what are virtual currencies. Says that though this term is used to describe the token but literally it is not a currency. When we say that Computer is infected by a virus then literally it doesnt mean that but this is the closest explaination wch can be given.
— Crypto Kanoon (@cryptokanoon) January 14, 2020

The petitioner also questioned RBI’s authority to regulate digital currencies as they mostly resemble characteristics of commodities. To strengthen his arguments, he also referred to various notices and reports published by the regulator against crypto, many of which contradict each other.

The judge, however, remarked that the digital currencies have features of “mode of exchange,” which puts them under the purview of the monetary regulator.

The arguments of the crypto attorney touched on policies and technology, showing the unjustified ban on the digital asset industry.

Speaking to Finance Magnates on the ongoing arguments of digital currencies' categorization, Sumit Gupta, co-founder and CEO of CoinDCX, said: "I believe there are many ways in which cryptocurrencies are classified, some countries view it as a commodity and some as a property/asset. It depends on how the countries’ government values the specific asset class - if they viewed it as [a] store of value then property classification or if they viewed as [a] medium of exchange then currency or commodity classification is right."

Appropriate categorization of digital assets will also decide the accurate purview on these assets, CoinDCX chief pointed out.

Ban if you can't regulate

Citing the regulatory attempts of many countries, including the United States, Japan, and the European Union, the lawyer also argued the baseless decision of the RBI to ban digital currencies because it cannot regulate them.

He also pointed out that the efforts of the crypto exchange to curb illegal activities like money laundering and terror financing by mandating the Know Your Customer (KYC) ) process.

"Due to [the] presence of stringent regulation measures such as KYC/AML etc., it has helped us in tracking and curbing down any bad practices," Gupta remarked on mandatory KYC. "This is the reason, mandatory KYC and other necessary regulatory measures are important for clamping down illegal activities on on-ramp fiat-crypto exchanges, as most of the illegal activities are still carried out in fiat currencies."

The apex court heard the arguments of the crypto lawyer for three straight days, and will now resume the hearing on Tuesday for further arguments.

Whatever may be the final judgment, the decision will surely make a huge impact on the crypto industry as a whole.