India’s highest court on Wednesday has overturned the Reserve Bank of India’s (RBI) 2018 order which barred lenders from dealing with cryptocurrency exchanges.
“Trading in cryptocurrencies now will be allowed,” said the top court, adding that RBI’s decision was “unconstitutional.”
The RBI said, on its turn, that while banks were forbidden from transacting in cryptocurrency, such currencies were themselves not banned.
“Firstly, the RBI has not prohibited VCs (virtual currencies) in the country,” said the bank in a document submitted to the court, according to the Economic Times. Instead, “the RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs.”
On April 6, 2018, India’s central bank issued a notice banning financial institutions from participating in virtual currency transactions. The country accounted for about 10 percent of all bitcoin transactions.
The CEO of WazirX, an Indian cryptocurrency exchange, told Reuters that “Investments had stopped and start-ups were staying away from starting business in the crypto and blockchain space in India which will change now that the Supreme Court has said that the RBI circular was unconstitutional.”
The Indian government has yet to finalize regulations on cryptocurrencies.
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