In April 2018, India’s central bank, the Reserve Bank of India (RBI), banned domestic financial institutions from providing banking services to cryptocurrency exchanges. The Statement issued at that time provided: “It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling [cryptocurrencies]. Regulated entities which already provide such services shall exit the relationship within a specified time.” Although there was an immediate court challenge, the result was to force the close of numerous cryptocurrency exchanges.
As reported by Bloomberg, and elsewhere, in a decision on March 4, 2020, the India Supreme Court struck down the RBI ban as unconstitutional. Although cryptocurrency had not been banned outright in India, there was a draft bill circulating since February 2019 that would have done just that, the “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019.”Another part of that bill concerned the RBI’s issuance of a central bank digital currency. Although the latter will probably still be pursued, the former now seems moot in light of the Supreme Court’s decision.
