Blockchain This Week: Delhi HC Judge Questions RBI’s Paradoxical Stance On Blockchain

Jurisdiction for disputes arising about blockchain transactions can be a vexed issue. Further, blockchain transactions aren’t enforceable in a court of law

These questions were raised by Justice Pratibha M Singh, as BlockHash Live 2020, a virtual event which saw professionals discuss the impact and opportunities of blockchain technology

The Supreme Court found that RBI’s acceptance of blockchain and rejection of cryptocurrency was actually a paradox since all cryptocurrencies function using blockchain technology.

Jurisdiction for disputes arising about blockchain transactions can be a vexed issue. Further, blockchain transactions aren’t enforceable in a court of law. So how can parties to such a transaction be held to a promise made in an entry in a ledger? When does the promisor and the promisee relation get established?

These questions, among others, were raised by Delhi HC sitting judge Justice Pratibha M Singh, as BlockHash Live 2020, a virtual event which saw professionals discuss the impact and opportunities of blockchain technology on businesses. The event was held from December 11-12, 2020. 

Singh also talked about the Supreme Court’s judgement in March 2020, where it quashed the Reserve Bank of India’s banking ban on cryptocurrencies. The SC, in its judgement, had referenced former finance minister Arun Jaitley’s budget speech in Parliament in February 2018, where he had said, “The government will take all measures to eliminate the use of crypto-assets in financing illegitimate activities and will also explore the use of blockchain technology for ushering in a digital economy” 

The Supreme Court found that RBI’s acceptance of blockchain and rejection of cryptocurrency was actually a paradox since all cryptocurrencies function using blockchain technology.

In her address at BlockHash Live, Singh noted that another concern for the use of blockchain is the absence of any global standards or guidelines. For blockchain to gain legitimacy, global standards need to be laid down at the international level, while similar consultations need to happen at the national level as well, to come up with country-specific guidelines for blockchain technology. 

Such positive regulation would enable the judicious use of blockchain technology for issuance of birth certificates, tracking of convicts, maintenance of land records, streamlining of transactions relating to vehicles, and even for the maintenance and growth of tree saplings. Several states such as Andhra Pradesh, Delhi, Karnataka, Jharkhand, Maharashtra, Telangana, Tamil Nadu and Kerala have announced policies for integrating blockchain in governance. 

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