Supreme Court has lifted the complete ban on cryptocurrencies on Wednesday which, now, could be seen as a big relief to virtual currency in the country.
The Supreme Court on Wednesday had 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.
Earlier, in 2018, RBI had issued a circular implementing a ban on all VCs that included Bitcoin citing that it is not a legal tender in the country.
However, the apex court quashing RBI's circular, said that the central bank's circular is unconstitutional, unreasonable and disproportionate.
"We have allowed the writ petitions," a bench headed by Justice R F Nariman said while pronouncing the verdict.
Cryptocurrencies , operated independently by a central bank, are digital currencies in which encryption techniques are used to regulate the generation of currency units and verify the transfer of funds.
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".
In an affidavit in January, RBI told the SC that it did not ban cryptocurrencies and had only ring-fenced regulated entities from risks.
(With inputs from Agencies)