India Supreme Court overturns RBI cryptocurrency banking restriction
India's Supreme Court struck down the Reserve Bank of India's 2018 restriction that had barred regulated banks from serving cryptocurrency businesses.
On March 4, India's Supreme Court invalidated the Reserve Bank of India's April 2018 circular directing regulated financial institutions not to provide services to people or businesses dealing in virtual currencies. The ruling came in Internet and Mobile Association of India v. Reserve Bank of India.
The Court focused on proportionality: the RBI had effectively cut cryptocurrency businesses off from the banking system even though virtual currencies themselves had not been prohibited by statute. Removing that banking barrier allowed Indian exchanges to reconnect with banks and rebuild fiat on- and off-ramps.
For Bitcoin, the ruling was significant because access to ordinary bank accounts often determines whether an exchange can function at all. It did not legalize every form of cryptocurrency activity or settle all future Indian policy disputes, but it reversed one of the world's most consequential banking restrictions on the sector.