Chennai: In what could be a monumental decision, the Supreme Court on Wednesday overturned the ban on cryptocurrency trading. The Reserve Bank of India had banned “any service in relation to virtual currencies” in 2018.

Cryptocurrency is virtual money that is digitally encrypted, making it impossible to counterfeit or double-spend. At the time of baning it, the RBI had argued that cryptocurrencies cannot be treated as currencies as they are not made of metal or exist in physical form, nor were they stamped by any government. The bench headed by Justice Rohinton F Nariman overruled central bank’s circular on the grounds of disproportionality.

The 2018 notice from the central bank sent panic to several local startups and companies offering services to trade in cryptocurrency. Nearly all of them have since shut shop.

A group of petitioners including trade body the Internet and Mobile Association of India had challenged the central bank’s circular, in part, arguing that India should look at most other nations that are not only allowing cryptocurrency trading but have moved to launch their own virtual currencies.

Last month China became the first country in the world to announce its digital currency. Several other countries including France, Singapore and Malaysia are also testing similar government-controlled digital currencies.