When governments are reluctant to make policy decisions, courts often have to intervene to provide advice. A petition asking the government to act on Bitcoin landed at the Supreme Court of India
Public Interest Litigation
A Public Interest Litigation (PIL) petition was filed in the Indian Supreme Court, seeking to issue instructions to regulate the flow of Bitcoin and ensure that it is reported to the chessboard. The petitioner, Dwaipayan Bhowmick, said:
“Some countries have submitted Bitcoin to their respective tax regimes, while a few other countries have designated it as a commodity, which has made Bitcoin subject to government regulation and the responsibility of the Exchequer, but no mechanism exists to this day in India. ”
The petitioner also argued that regulators such as the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) were trying to evade their responsibility for the regulation of Bitcoin.
“It is further indicated that RBI & SEBI have tried to discharge each other by asking it to be called” currency “or” convenience “… A mere reading of that market price would reveal the financial implications on a large scale such as cryptography money could cause anti-national activities such as terrorist financing, money laundering, religious conversions, drug trafficking, etc.
India – Ambiguous position
Although there are many Bitcoin exchanges like Coinsecure, Zebpay and Unocoin operating in India, regulators have not issued guidelines for Bitcoin operations. The RBI has in the past (2013 and 2017) warned investors about the risks inherent in investment in cryptocurrencies. A committee has been set up to examine the issues surrounding digital money, but its report has not yet been made public. Given the lack of clear guidelines, investors and Bitcoin exchanges operate in a regulatory vacuum in India.
Courts intervene when governments abdicate responsibility
As we have seen in the past, courts often intervene to judge when governments do not offer clear guidelines. While US regulators are still debating whether Bitcoin is a commodity or a currency, a Miami judge decided in 2016 that Bitcoin was not money and could not be considered a financial instrument. He also ruled that his sale involuntarily for illegal purposes does not constitute money laundering. In countries with a common law system (as opposed to civil law systems), judicial opinions have the weight of the law and serve as precedents for future cases. It is preferable that governments take the advice of experts and clarify their position on cryptocurrencies, otherwise regulations will be piecemeal based on court decisions.