Abraham C Mathews
For Indian Bitcoin enthusiasts looking for some ray of hope, the government effectively shut out the sunlight with the Draft Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019. The solicitor general informed the Supreme Court recently that the government expected the Bill to be introduced and passed in the next session of Parliament.
This author has previously argued that Bitcoins are inherently such that they cannot be regulated, and therefore it is only foolhardy for the government to even attempt. However, the present draft Bill does not stop there. It not only bans the mining, generation, holding, selling, dealing in, issue of, transfer of, disposal or any other use of cryptocurrency within India, but also recommends a maximum jail sentence of 10 years.
These raise at least two important constitutional questions. One, what is the threshold of menace beyond which the government can ban any commercial activity; and two, what are the limits to sentencing powers of the State. Article 19 guarantees the right to carry on any trade, occupation or business, subject to reasonable ‘restrictions’ that may be imposed by the State right through law.
The government argues that cryptocurrencies can destabilise the financial system and promote money laundering. These, if true, are indeed reasons to restrict. Though it is perhaps fair to question whether they are plausible outcomes.
At its peak, there will be around 21 million bitcoins in circulation (presently around 17 million have been mined). Let’s take the present market value of about […]
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