India’s central bank, the Reserve Bank of India (RBI) crippled the cryptocurrency market two years ago by banning local financial institutions that were involved in crypto trading.

The country’s Supreme Court finally turned down the ban on March 4, 2020, and revitalized the crypto-economy of the nation. Given the size of the economy (which is third-largest in Asia) and population, the verdict can be considered a blessing for not only Indian crypto traders but for people around the world dealing with virtual currencies.

A three-judge bench of the court issued a rule on Wednesday saying the previous RBI order “unconstitutional”.

The verdict came after a long fight

On April 6, 2018, the RBI imposed a ban on digital currency trading that restricted local financial institutions from providing any service relating to cryptocurrencies. RBI had several points in favour of the decision at that time. The ban was seemingly necessary to reduce the “ring-fencing” of their financial system.

RBI also tried to make people understand that digital coins are not currencies at all because they do not have a physical appearance and they are not approved by the government.

The order set up a panic among local crypto exchanges and startups and forced them to either close, relocate to other countries, or convert their business policy to crypto-to-crypto trading. Immediately the Internet and Mobile Association of India and several other crypto startups challenged the RBI’s order and filed petitions to the Supreme Court.

Several sessions of hearing were conducted since then but no clear decision had been reached until Wednesday. During this time several firms had been forced to shut down due to the plunging of trade.

However, the RBI claimed that although banks were barred from making any crypto transaction, such coins were not actually banned. Now the Supreme Court verdict puts an end to the confusion.

Experts are praising the rule

The surviving exchanges and potential startups of India are now quite happy with the Supreme Court decision.

CoinDCX founder and CEO Sumit Gupta is hopeful about the crypto future in the country, saying, “The uplifting of the ban by the Supreme Court is going to open new opportunities for India in terms of investments, economy and a market as a whole. A few of the surviving petitioners of the case, we are thankful to the Supreme Court for hearing our side of the story. We have always seen cryptocurrency as a potential to unlock India’s dream of becoming a $5 trillion economy.”

Another crypto expert Tanvi Ratna, CEO, and founder of Policy 4.0 wrote in an email on March 3 that if the petitioners win there should be a resurgence of liquidity and revitalization of crypto exchange activity. However, she also warned that the rule might be a temporary solution because the verdict against the RBI does not necessarily alter national policy.

In addition, the Supreme Court did not blame the RBI for acting unconstitutionally. Rather it said the order was turned down as it could not treat the institutions involved in crypto trading properly.

Crypto market jumped as India lifts the ban

Digital currency price surged and many exchanges have been overloaded after the Supreme Court’s announcement. The Crypto market is showing a positive attitude with a 5% rise, returning to above $9,000 which is two-month high.

Crypto-related firms in India also welcomed the verdict. Transactions have increased sharply, causing some exchanges to crash due to overloaded situations. Prominent crypto exchange ZebPay servers shut down due to the high flow of new users trying to sign up immediately after the rule. The firm twitted, “The volume of members and new members logging into ZebPay right now has exceeded our biggest estimates.”