The RBI had prohibited banks and financial institutions from providing services with relation to cryptocurrencies.
Cryptocurrencies operate independently of a central bank. These 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”.
The apex court bench headed by Justice R F Nariman has allowed the writ petitions, challenging the RBI circular.