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The Supreme Court of India issued a notice on 13 November 2017 to the nation’s central bank and related financial ministries to hasten their regulatory mechanisms with regard to bitcoin. Concerns about cryptocurrency’s lack of central control and potential use for money laundering have sounded alarms throughout the country’s bureaucracies.
Supreme Court of India Orders Agencies to Regulate Bitcoin
“Lack of any concrete mechanism pending the regulatory framework,” a newly released petition to the Supreme Court of India asserts, “has left a lot of vacuum and which has resulted in total unaccountability and unregulated Bitcoin (crypto money) trading and transactions,” advocate Dwaipayan Bhowmick urged. He’s asking the country’s financial regulatory bodies be compelled to “control the flow of Bitcoin by forming a committee to frame an appropriate mechanism to regulate the same.”
The petition was granted, and was issued by Justices AM Khanwilkar and DY Chandrachud along with Chief Justice Dipak Misra.
Government fear of bitcoin is palpable, and the petition speaks to how an “emerging trend of crypto money if unchecked and unregulated is threat to exchequers money and financial sovereignty of the country,” emphasis added. Exchequers are holdovers from British colonial rule, and essentially act as a sole spending authority – a kind of central government fund made from taxation.
The 43 page petition carefully threads the argumentative needle of at once claiming bitcoin to not be a currency while, since it is used in transactions, to still fall under financial regulation regimes.
The petition comes at the end of a tough month for Bitcoiners in India. More official statements about cryptocurrency ills continue to be spread by government officials at the highest levels, and its tabloid press is full of stories conflating bitcoin with crime.
According to The Economic Times, the Supreme Court responded to the petition in the affirmative, and has “issued notice to the ministries of Finance, Law and Justice, Information Technology, market regulator SEBI and the RBI, on the plea which also sought setting up of a panel to frame a mechanism to regulate the flow of Bitcoin.”
That phrase, “the flow of bitcoin” appears in several sources. Just how that is to be accomplished and what it means is something of a mystery, and perhaps reveals a fundamental problem: regulators might not understand bitcoin.
After asserting falsely bitcoin to be completely untraceable, the petition cites how “certain countries have made Bitcoin (crypto money) subject to their respective tax regimes, while a few other countries have designated it as a commodity, thereby making Bitcoin subject to government regulation and accountable to the exchequer, but no such mechanism exists in India.”
What do you think of the Indian government’s actions? Tell us in the comments below!
Images courtesy of: Pixabay, and Shutterstock SC of India