Supreme Court of India Set To Hear Final Arguments on Crypto Exchange Ban

According to local media, India’s Supreme Court will most likely be able to hear final arguments from those against the ban imposed on cryptocurrency exchanges by the Reserve Bank of India (RBI) today (September 26th.)

Originally, the Court was set to hear arguments on Tuesday, but an update from the Financial Express noted the judiciary body was unable to take up the matter then.

Sitting to hear final arguments is the latest step in a long-running saga between the Supreme Court, the RBI, and cryptocurrency exchanges in India.

Pushing Back Against A Ban

From last December to February of this year, the government of India maintained cryptocurrencies were not seen as legal tender.

On April 5th, the RBI said any entity that was regulated by them would have to end any business relationships with “firms and individuals dealing in cryptocurrencies.”

A number of petitions were filed against this decision, and on July 3rd, the Indian Supreme Court denied to grant interim relief, which fully implemented the RBI ban on July 6th.

Later in the month, the RBI stood fast, explaining to the Supreme Court how cryptocurrencies were not able to be regulated by the state and will also facilitate illegal transactions.

After time was granted to respond to petitions, the RBI and the central government were set to have a hearing with the Supreme Court on September 12th.

This hearing was postponed because many respondents were not actually able to file their responses, according to the Financial Express.

A Big Hit To The Industry

The RBI’s rationale behind their decision is to keep investors safe, especially those who might have been in the middle of severe price fluctuations or scams.

Cyrptocurrency exchanges who have challenged the ban say they have largely kept in line with anti-money laundering and know-your-customer stipulations.

Exchanges have also reportedly expressed their willingness to comply with more regulations by authorities.

According to Quartz, the exchange industry has suffered mightily since the ban. One exchange, Unocoin, who previously had more than 200,000 traders each month, had just about 20,000 in the months after July 6th.

Bank of England Governor Recommends Replacing Dollar With 'Libra-Like' Digital Currency

  • BOE Governor Mark Carney proposed replacing the US dollar with a libra-like digital currency as the global reserve. 
  • Called for a dramatic shift in policy to address the changing economic landscape. 

Bank of England Governor Mark Carney has made a radical recommendation for central banks that the U.S. dollar be replaced with a Libra-like digital reserve currency. 

Replacing the Dollar

Speaking at the Federal Reserve’s annual Jackson Hole Symposium on Aug. 23, Carney called for a dramatic shift in global monetary policy that would see central banks taking a greater interest in digital currencies such as Facebook’s forthcoming libra. 

The BOE Governor’s proposal would replace the U.S. dollar as the world’s reserve currency with a digital alternative. While it was unclear if Carney was actually suggesting that libra could be used to fill the void, his intent was to spur interest in a fiat alternative for global reserves. 

Carney argued that proactively replacing the dollar with a digital coin substitute would be preferable to allowing another national currency usurp its status--such as the Chinese renminbi. 

He pointed to the global economic uncertainty in part being generated by deteriorating U.S. trade relations, 

The combination of heightened economic policy uncertainty, outright protectionism and concerns that further, negative shocks could not be adequately offset because of limited policy space is exacerbating the disinflationary bias in the global economy.

He continued, 

When change comes, it shouldn’t be to swap one currency hegemon for another. Any unipolar system is unsuited to a multi-polar world. We would do well to think through every opportunity, including those presented by new technologies, to create a more balanced and effective system.

Cryptocurrencies Gaining Prominence

The introduction of a non-fiat currency could have the effect of devaluing the dollar, and most national currencies, which could be one way for central banks to introduce inflation to erode away the record levels of debt accumulating globally. 

Some have speculated that an alternative asset such as gold could be used as an intermediate. However Carney, who announced several months ago he would be stepping down as Governor of the BOE, has shown a route to fiat alternatives which includes the creation of digital currencies.

He lauded the technology for its efficiency in payments and cross-border transactions, 

The most high profile of these has been Libra – a new payments infrastructure based on an international stablecoin fully backed by reserve assets in a basket of currencies including the US dollar, the euro, and sterling. It could be exchanged between users on messaging platforms and with participating retailers.

While Carney’s suggestion to replace the U.S. dollar is one of the most radical proposals yet, it does give insight into the global trend in central banks to pursue digital currencies as an alternative to their outdated fiat counterparts.