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.
Author
David Zaslowsky
Email
David Zaslowsky is partner in the Litigation Department of Baker McKenzie's New York office. He helps companies solve complex commercial disputes in arbitration and litigation, especially those involving cross-border issues and Section 1782 discovery. David has a degree in computer science and, as a result, has worked on numerous technical-related disputes, including, most recently, those involving blockchain and artificial intelligence. In April 2025, Attorney Intel named David one of the top 25 blockchain lawyers in the country. He is the editor of the Firm's blockchain blog and co-editor of the firm's International Litigation & Arbitration Newsletter. David has been included for a number of years in the Chambers USA Guide and Chambers Global Guide for his expertise in international arbitration. He also sits as an arbitrator and is on the roster of arbitrators for a number of arbitral institutions. David sits on the Board and chairs the governance committee of the New York International Arbitration Center, and is a founding member of the International Arbitration Club of New York. For over 35 years, he has written and spoken often on the subjects of arbitration and international litigation.