The lawyer behind getting India’s 2018 crypto ban quashed hasn’t ruled out going to court again
- Ikigai Law’s Anirudh Rastogi represented Indian crypto exchanges in the
Supreme Courtcase, which led to the Reserve Bank of India’s crypto bangetting quashed.
- According to him, the ideal case would be for the government to create a self-regulatory organization (SRO) to oversee the crypto industry in India.
- However, the matter could go to court if the government’s upcoming crypto bill is too restrictive.
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The industry as a whole is hoping that the government will find the right balance so as to not restrict innovation and provide legitimacy to the sector. The lawyer behind getting India’s 2018 crypto ban quashed, Anirudh Rastogi, believes an overly restrictive stance could lead to another battle in the Supreme Court.
Rastogi represented Indian crypto exchanges for Internet and Mobile Association of India (IAMAI), whose members include WazirX, CoinDCX and others, in the appeal at the Supreme Court against the 2018 ban on cryptocurrencies issued by the Reserve Bank of India (RBI).
- A self-regulatory organisation to oversee the crypto industry
- Sunset clauses for stringent laws
- A sandbox setup for crypto businesses to develop their use cases
- Allowance of gas fees payments using cryptocurrencies
What’s the big deal about gas fees?
Gas fees, simply put, are transaction fees. These payments are made by users to compensate the network for the computing energy required to process and validate transactions. And, they’re done during cryptocurrencies.
“If the government bans use of cryptocurrency for payments, the right exceptions within that are important… Licensing for cryptocurrency based cross-border remittances would be desirable since it can make remittances significantly cheaper and faster. So allowing limited payments activity would actually be good,” Rastogi explained.
Rastogi’s wish list for India’s crypto bill
“I wish our government had taken a slightly more methodical approach towards crafting this regulation,” Rastogi said in conversation with WazirX’s head of public policy, government affairs and content, Aritra Sarkhel, during Business Insider’s webinar.
According to him, it’s not a surprise that the Indian government is not looking to recognise Bitcoin as a currency. “That has been a consistent stance taken by the government, right from Arun Jaitley’s 2018 Budget speed,” he said.
At the same time, fears persist. An overly restrictive regime could also pose a problem. “Over regulating a new, emerging technology could be deeply problematic because it’s a rapidly evolving space. And, for the government to keep pace with that and in terms of legislation is obviously going to be difficult,” said Rastogi.
Instead, he proposes that the government should lay out broad principles but not micro-manage. Other industries, like over-the-top (OTT) services and e-commerce, self-regulated themselves for a good couple of years — and the same allowance should be given to the crypto sector in India.
My ideal case would be for the government to create an SRO [self regulatory organisation], which could then lay down further guidelines on two or three specific issues — one would be investor protection and advertising.
If the government does introduce more stringent regulation it should come with a ‘sunset clause’. Simply put, the strictest parts of the law should be accompanied by an expiry date, at which point they should be reevaluated.
Alternatively, the government could even set up a sandbox environment for cryptocurrency experiments. “The RBI sandbox in place today specifically bans cryptocurrency businesses, which is bizarre. Sandboxes are meant to be created exactly for these types of businesses, which are cutting-edge, less understood and have regulatory concerns — that’s why you create a sandbox,” explained Rastogi.
Questions remain unanswered
The question around whether or not cryptocurrency trade would still be permitted in the country also hangs in the balance until an official draft of the bill is brought in for public review.
The silver lining is that Sitharaman clarified that the upcoming bill is most definitely different from its previous iterations. However, it is still pending approval from the Cabinet before it can be introduced into the lower house of Parliament — the Lok Sabha — for discussion.
As my colleague Priyam likes to say, if this bill was a digital asset it would be more volatile than Bitcoin or Ethereum or anything else trading out there.
Here’s the full conversation with Anirudh Rastogi and WazirX’s head of governance affairs, public policy and content, Aritra Sarkhel:
#LIVE | Two days of #WinterSession in Parliament, two sets of comments from Finance Minister #NirmalaSitharaman —… https://t.co/CQLDkL4pIC— Business Insider India (@BiIndia) 1638275419000
Disclosure: This conversation is part of a series on Business Insider, sponsored by WazirX.
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