SC allows pleas against RBI circular barring banks from providing services related to cryptocurrency

New Delhi: The Supreme Court on Wednesday allowed a batch of pleas challenging the 2018 circular of the Reserve Bank of India which had prohibited banks and financial institutions from providing services with relation to cryptocurrencies.

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.

“We have allowed the writ petitions,” a bench headed by Justice R F Nariman said while pronouncing the verdict.

According to the April 6, 2018 circular, the entities regulated by the RBI are prohibited 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.”