India's central bank clarified on Monday that an old order forbidding financial institutions from supporting cryptocurrency transactions had been struck down by the country's highest court in 2020, allowing investors to breathe a sigh of relief.
In a new note, the regulator said banks should not cite its 2018 circular as a reason to disallow trades in digital currencies as it had been "set aside by the Hon'ble Supreme Court" last year.
"The circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from," the note stated.
The latest order, addressed to all commercial and co-operative banks, followed local media reports that some financial firms, including the country's largest banks, had advised investors against dealing in digital currencies.
"It's amazing to see @RBI clarifying & helping solve uncertainty for crypto in India," Nischal Shetty, founder and CEO of Indian crypto exchange founder WazirX, said in a tweet. "There are over 1.5 crore Indians in crypto. This news has brought joy and confidence to everyone in the sector."
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Still, the RBI order directs institutions to continue to perform due diligence processes before providing services.
"This is positive news for the entire crypto industry - businesses, st...