“Trading in cryptocurrencies now will be allowed,” the top court noted.
In April 2018, the RBI had issued a circular barring banking and financial services from dealing in virtual currency or cryptocurrency such as Bitcoin, most valued cryptocurrency in the world.
Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of currency units and verify the transfer of funds, operating independently of a central bank.
The RBI had stated that virtual currencies (VCs) (cryptocurrencies and crypto assets) “raise concerns of consumer protection, market integrity and money laundering.” In view of the associated risks, banks were asked not to deal with crypto-related businesses.
This circular was challenged by an industry group Internet and Mobile Association of India (IMAI) before the SC.
In Video:Supreme Court allows cryptocurrency trading, cancels RBI’s 2018 circular