How Parliament can expedite the crypto ban bill & importance of Apr 3
The Indian Supreme court issued a landmark verdict on March 4, 2020 striking down the RBI prohibition as unconstitutional. There is a lot to be said about the verdict itself, for which I guide you to some dedicated analysis I have already put out on the topic — a video reviewing the full 180 page verdict, as well as an op-ed on Coindesk.
As discussed in my pre-verdict blog, the real clincher is not the RBI circular but the draft ban bill, which could still be passed in Parliament. In fact, there are multiple points in the verdict where the justification for exactly such an action comes up (check video).
Two alternatives of action by the Indian government
There are two routes for the government if they still wish to proceed with a prohibition or ban. The first is an appeal of the court verdict by the RBI and the second is the passage of the ban bill in Parliament.
In this blog I will analyze the second option, i.e., how the bill could be expedited through Parliament. There is already some news around an RBI appeal in the media. If you’re interested in examining the prospects for that, leave me a comment below.
Depending on the urgency the government sees in stemming the flow of cryptocurrencies, different routes could be adopted in Parliament. The passage of the bill and the amount of time it takes is somewhat dependent on procedure; of whether the bill is introduced as a money bill or finance or ordinary bill.
Understanding the types of bills in the Parliamentary route
Money bills hold a special place in Indian parliamentary procedure. Money bills can only be introduced in the Lok Sabha by a Minister (usually Finance Minister) upon the recommendation of the President. The Rajya Sabha cannot make amendments to this bill, it can only give recommendations which the Lok Sabha can accept or ignore. The Rajya Sabha also only has a 14 day window to clear a money bill, after which it is deemed passed.
In the case of Finance bills or Ordinary bills, both houses of Parliament have equal deliberation on the topic, and the procedure can take longer to reach consensus.
The conditions of money bills are laid out in the constitution, however the final classification of a bill as a money bill is a decision of the speaker of the House. We have seen bills such as the Aadhaar Act passed as money bills. The Supreme Court was petitioned on this aspect and ultimately upheld that the bill would classify as a money bill. Typically, issues such as money laundering are considered to fall under the purview of money bills. and the cryptocurrency ban bill would likely be classified as such.
What does this imply for the speed of passage of a ban?
In the case of an ordinary bill, we could some debate in Parliament over the issue. It could be possible that leaders from states which are trying to build large blockchain ecosystems, would petition the government for a regulatory framework instead, and debate the issue in Parliament.
However, in the case of a money bill route, their voices would not have much weight, as only the majority vote of the Lok Sabha would matter. This majority is decisively with the ruling NDA government.
What this implies is that if the the cryptocurrency bill is introduced as a money bill, we can expect it to be passed and brought into force very quickly. Money bills are capped by a time limit and can get passed from anywhere between 1 to 14 days from introduction.
It all comes down to April 3rd
Both routes of an RBI appeal, and government legislation theoretically come to a pause on April 3rd, 2020.
The RBI has 30 days to appeal a verdict released on Mar 4, 2020. This implies a deadline of April 3rd 2020.
The Parliament budget session is currently ongoing and also ends on April 3, 2020.
I say this is a theoretical deadline, because the RBI can extend its appeal period with justification. If no action is taken until April 3rd, we can assume the issue could be pushed to the monsoon session of Parliament.
So everyone watching this issue, sit tight until April 3rd!
