NEW DELHI: The Supreme Court on Wednesday quashed RBI’s 2018 circular preventing banking and financial institutions from providing services to any individual or business entities dealing in cryptocurrency or virtual currency, saying it was a disproportionate measure taken by the regulator.
The verdict would allow companies in the sector to use the banking platform to trade and transact in cryptocurrency. The central bank had contended that allowing cryptocurrency (bitcoins) compromised the integrity of the banking system.
A bench of Justices R F Nariman, Aniruddha Bose and V Ramasubramanian said while RBI had a special role in the economy and was empowered to take such decisions, it must pass the proportionality test in order to be valid. It said there was no evidence banking and financial sectors suffered any damage due to trading
