Vol.15 Issue 2 (2019)
The Case for Regulating Crypto-Assets
In July 2019, the Ministry of Finance, Government of India announced that an Inter-Ministerial Committee (the ‘Committee’) had submitted its report (the ‘Committee Report’) recommending that possessing or dealing with cryptocurrency be banned and made a criminal offence. This article examines whether such a ban is justified under our constitutional scheme. The article finds that the right to carry on various kinds of crypto-asset activities can be traced to various enumerated fundamental rights under the Constitution of India. Analyzing the Committee Report, the article finds that its recommendation of an outright ban is unlikely to be a reasonable restriction on these rights, as such a ban is likely arbitrary and excessive. Since crypto-assets are a value-neutral platform technology - akin in many ways to the Internet - the article recommends that an empirical approach be adopted towards studying any risks associated with crypto-assets, and that a regulatory approach be adopted to mitigate these risks rather than an outright prohibition. This would comport with the interests of liberty, innovation, and consumer protection.
Leader, Technology Law, Nishith Desai Associates.