India’s Supreme Court struck down a central bank directive that effectively outlawed virtual currencies in Asia’s third-largest economy.
A three-judge bench headed by Justice Rohinton F. Nariman agreed with petitions by cryptocurrency exchanges, start ups and industry bodies that had challenged the Reserve Bank of India’s April 2018 decision to ban banks from offering any services to support digital currencies.
The ruling is a boost for virtual currency investors and businesses in India, where a skeptical federal government is mulling stringent regulations. The Supreme Court is separately hearing another case, in which it will decide on regulations for digital currencies, and Wednesday’s judgment weakens the case for strict norms.
Meanwhile, the Indian central bank has been exploring the creation of a sovereign-backed digital currency even as it escalated its crackdown on private instruments like bitcoin, citing the potential for money laundering and other illegal activities. The RBI didn’t immediately respond to a request for comment.
Opponents of the curbs argued that the central bank wasn’t empowered to issue the ban and its directive hadn’t adequately studied the matter.
Kunal Barchha, co-founder of CoinRecoil.com, said his cryptocurrency exchange will now approach a couple of potential investors who had initially been lined up for funding but backed off after the RBI’s ban. “Now crypto traders, investors, miners, can proudly speak up about what they do for a living. Now they won’t be judged as criminals,” he said.