Banks allowed to provide services on cryptocurrencies

The Supreme Court Wednesday allowed banks and financial institutions from providing services related to cryptocurrencies by setting aside the RBI’s 2018 circular which had prohibited them.

Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds, operating independently of a central bank.

A three-judge bench, headed by Justice RF Nariman, said the Reserve Bank of India (RBI) circular is liable to be set aside on the ground of “proportionality”.

“Accordingly, the writ petitions are allowed and the circular dated April 6, 2018 is set aside,” said the bench, also comprising justices Aniruddha Bose and V Ramasubramanian.