BH CORRESPONDENT, New Delhi: The Supreme Court on Wednesday ended a 2018 ban on banks from dealing in virtual currencies such as cryptocurrency, including bitcoins. A three-judge Bench led by Justice Rohinton Nariman quashed the Reserve Bank of India notification issued in April 2018 that had introduced the restriction.
Cryptocurrency, or virtual currency, is primarily an internet-based medium of exchange. It uses cryptographical functions to conduct financial transactions between two parties through private and public keys.
One of the most beneficial features of cryptocurrency is the fact that it is not controlled by any central authority and different banks and financial institutions can operate it independently. Transfers between two parties can be done with a minimal processing fees.
On 5 April 2018, the banking regulator declared that banks shall not deal with the crypto-related businesses and entities regulated by the RBI should stop providing such services. It cited concerns of consumer protection, market integrity and money laundering around virtual currencies, also referred to as crypto currencies and crypto assets.
A day later, the RBI had issued the formal notification stating that entities regulated by it shall not deal in virtual currencies or provide services for facilitating any person or entity in dealing with virtual currencies.
