The Supreme Court on Wednesday struck down the Reserve Bank of India (RBI) 2018 circular that barred banks from giving access to companies in trading in cryptocurrencies.
A three-judge Bench of Justices Rohinton Fali Nariman, S Ravindra Bhat and V Ramasubramanian allowed the plea of the Internet and Mobile Association of India (IAMAI) challenging RBI’s 2018 circular that directed regulated entities to not deal with cryptocurrencies.
The IAMAI, whose members include cryptocurrency exchanges, and others had approached the top court objecting to a 2018 RBI circular directing regulated entities to not deal with cryptocurrencies.
The petitioners had argued that the RBI’s circular taking cryptocurrencies out of the banking channels would deplete the ability of law enforcement agencies to regulate illegal activities in the industry.
IAMAI had claimed the move of RBI had effectively banned legitimate business activity via the virtual currencies (VCs).
The RBI on April 6, 2018, had issued the circular that barred RBI-regulated entities from “providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to the purchase or sale of virtual currencies”.