INSUBCONTINENT EXCLUSIVE:
The order in effect lifted the ban on trading in virtual currency, cryptocurrency and bitcoins.
What does it really mean for
cryptocurrency?
The verdict is important for many reasons
of other signals that may be read into or interpreted from this verdict.
First, the order upholds the principle of fairness and equal
The fact that the apex court outright shot down a strong policy step by RBI against a whole industry has consequences on the fairness of our
regulators given their quasi-judicial status
Since the RBI curbs impact a whole innovative industry -- an industry that posed challenges to a whole setup of incumbent players under the
grow.
Secondly, the verdict would raise questions on how our regulators understand themselves and their role and jurisdiction
RBI was formed under an act of Parliament and that act gives it powers to form regulations
Those regulations cannot, therefore, supersede the rights and freedoms given to citizens and corporations through acts of the Constitution
became fundamental law only after a SC judgment, but was unsaid before that)
When combined with the fundamental right to trade, it is not constitutional for the regulators to shut down industries, when they do not
violate anything fundamental or are not fraud
This void in understanding was stifling fintech innovations and the SC verdict lifts that veil, albeit only by interpretation.
Third, by
vested with a single identified regulator, companies do not have a choice to go to anyone else
Similarly, the regulator also does not and must not have an absolute choice of killing an industry
It can surely decide the nature, degree and extent of regulation or even decide not to regulate, but stifling and choking is not one of the
A reluctance to regulate something cannot be the reason enough to stifle or kill a full industry, and for that matter, even a single
entity.
So, what impact will the SC verdict have on crypto tokens and crypto exchanges? This verdict gives a thumbs-up to the crypto
exchanges and crypto as an asset class, as indirectly they have not been found violating any other law of the land
So, except for the RBI ruling, it in a way tells us that everything else was legit
Also, it upholds (and in a way decriminalises) the investors who have invested in cryptos.
All in all, the verdict removes the arbitrariness
of regulatory actions even though it does not disgrace it at all.
(Manish Kumar, a fintech entrepreneur, is co-founder of GREX and RealX