India's Crypto Comeback: Supreme Court Overturns Banking Ban

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The Indian cryptocurrency landscape has taken a pivotal turn following a landmark ruling by the country’s Supreme Court. After years of regulatory uncertainty, the court has overturned the Reserve Bank of India’s (RBI) 2018 directive that prohibited banks from providing services to crypto exchanges. This decision marks a critical shift—not just legally, but psychologically—for millions of Indian investors eager to re-engage with digital assets. With renewed confidence, the market now stands on the brink of what could be a major growth phase, especially in the area of crypto derivatives, Bitcoin trading, and decentralized finance innovation.

This article explores how the lifting of the banking ban is reshaping India’s crypto ecosystem, driving demand for advanced financial instruments like futures and options, and positioning the country as a potential hub for blockchain innovation.

Rising Demand for Crypto Derivatives in India

Interest in cryptocurrency derivatives among Indian users has surged dramatically over recent years. According to Sumit Gupta, CEO of CoinDCX—one of India’s leading crypto platforms—there was already strong user demand for futures trading as early as 2020.

Sathvik Vishwanath, co-founder of Unocoin, another early Indian exchange, echoed this sentiment. Despite regulatory hurdles, Unocoin continues to maintain approximately 26,000 monthly active users. The team plans to launch derivative and options products in the near future, signaling a strategic pivot toward more sophisticated trading tools.

“While we believe it's time to roll out a derivatives market, restrictions have held us back,” said Vishwanath.

Pankaj Balani, CEO of Delta Exchange, brings deep institutional experience to this space—having previously worked on derivatives at Union Bank of Switzerland before launching his crypto venture. His Mumbai-based team has been focused on expanding derivative offerings throughout 2020, culminating in the launch of new Bitcoin and Ethereum options. These products allow traders to make leveraged bets on price volatility—an increasingly popular strategy among retail and institutional investors alike.

Balani emphasizes the untapped potential:

“We’ve found that derivatives remain one of the least penetrated areas in crypto. In traditional forex markets, derivatives volume is four to five times higher than spot trading. In crypto, we’re still far behind. The biggest challenge for platforms today is scaling effectively.”

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Global Players Enter the Indian Market

India’s growing appetite for digital assets hasn’t gone unnoticed by international players. In November 2019, Binance—the world’s largest cryptocurrency exchange—acquired WazirX, one of India’s top digital asset platforms. This acquisition positioned Binance to tap directly into India’s vast, young, tech-savvy population.

Nischal Shetty, founder of WazirX, played a crucial role in challenging the RBI ban through legal channels. When news broke that the Supreme Court had ruled in favor of crypto businesses, he celebrated publicly on Twitter:

"We’re awaiting the copy of the judgement. Apparently it’s 300 page judgement. Lot to read! But rejoice, #IndiaWantsCrypto has won. YOU have won."

His message resonated across social media, reflecting widespread optimism within the community.

Meanwhile, blockchain fintech firm Cashaa reported over 150% month-on-month growth in cryptocurrency activity on its platform. By enabling seamless fiat-to-crypto conversions, Cashaa serves a growing base of Indian users who are actively trading Bitcoin—some estimates suggest up to 1,000 BTC traded daily via OTC desks involving Indian clients.

Kumar Gaurav, CEO of Cashaa, remains bullish:

“I expect this trend to continue, with strong demand for crypto in India throughout 2025. Before the ban, Indian exchanges saw $50–60 million in daily volume. We can anticipate those levels returning soon.”

Supreme Court Ruling: A Constitutional Victory

At the heart of this transformation is the Supreme Court’s historic judgment. In March 2020, the court struck down the RBI’s 2018 circular banning regulated financial institutions from serving crypto companies, ruling it unconstitutional and disproportionate.

The court emphasized that while regulation is necessary, an outright ban violated fundamental rights related to business and trade under Article 19(1)(g) of the Indian Constitution. This verdict not only restored banking access for exchanges but also sent a powerful message: innovation cannot be stifled without due process.

For platforms like Delta and CoinDCX, the ruling meant they could resume partnerships with banks, facilitate smoother INR deposits and withdrawals, and scale operations without fear of sudden shutdowns.

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What’s Next? Building Infrastructure for Mass Adoption

With legal clarity improving, attention is shifting toward infrastructure development. Exchanges are investing heavily in security, user education, and product diversification—including staking, lending, NFTs, and DeFi integrations.

There’s also growing interest in creating localized solutions tailored to Indian users—such as vernacular interfaces, UPI-integrated deposit systems, and mobile-first designs. These innovations aim to lower entry barriers for non-technical users and drive adoption beyond metro cities into tier-2 and tier-3 towns.

Regulators have yet to introduce a comprehensive framework for cryptocurrencies, but discussions around taxation and potential central bank digital currency (CBDC) indicate that digital assets are now part of mainstream policy discourse.

Frequently Asked Questions (FAQ)

Q: What did the Indian Supreme Court rule regarding cryptocurrency?
A: In March 2020, the Supreme Court overturned the RBI’s 2018 ban on banks serving crypto exchanges, declaring it unconstitutional. This restored banking access for crypto platforms operating in India.

Q: Are cryptocurrency derivatives legal in India?
A: While there is no explicit law banning derivatives, their regulatory status remains evolving. However, platforms now operate more freely post-Supreme Court ruling, allowing them to offer futures and options products.

Q: Can Indians legally buy Bitcoin now?
A: Yes. There is no law prohibiting individuals from owning or trading Bitcoin or other cryptocurrencies in India. The government has proposed tax regulations but has not outlawed usage.

Q: How big is India’s cryptocurrency market?
A: Estimates suggest over 15 million crypto users in India as of 2025, with daily trading volumes potentially reaching $60 million during peak periods before the ban.

Q: Is crypto trading taxable in India?
A: Yes. Since 2022, profits from crypto transactions are taxed at 30%, plus applicable surcharge and cess. A 1% TDS also applies on all transfers above a certain threshold.

Q: Will India introduce a central bank digital currency?
A: The Reserve Bank of India is actively developing a digital rupee (e-Rupee), with pilot programs already underway for both wholesale and retail use cases.

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Final Outlook: A New Dawn for Indian Crypto

The Supreme Court’s decision didn’t just lift a banking restriction—it reignited hope and innovation across India’s blockchain ecosystem. With increasing demand for crypto derivatives, expanding access to global platforms, and rising institutional interest, India may soon emerge as one of Asia’s most dynamic digital asset markets.

As infrastructure matures and regulatory clarity improves, the next phase will focus on mass adoption, financial inclusion, and technological leadership—all powered by blockchain.

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