India Sees Surge in Cryptocurrency Trading After Bank Ban Lifted

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In a landmark decision on March 4, the Supreme Court of India struck down the Reserve Bank of India’s (RBI) four-year banking ban on cryptocurrency transactions. This pivotal ruling has catalyzed a dramatic increase in crypto trading activity across the country, marking a turning point for digital asset adoption in one of the world’s most populous economies.

The RBI had issued its restrictive directive in April 2018, prohibiting banks and financial institutions from providing services to individuals or businesses dealing in cryptocurrencies. While the ban did not outlaw crypto ownership, it severely limited access by cutting off fiat gateways—making it nearly impossible to deposit or withdraw Indian rupees from crypto exchanges.

Despite these constraints, several platforms continued operating, focusing solely on crypto-to-crypto trades. Among them, CoinDCX, now recognized as one of India's leading cryptocurrency exchanges, maintained its operations and user base throughout the regulatory freeze.

Post-Ruling Growth Spurt

Following the Supreme Court’s reversal of the ban, Indian crypto platforms have reported explosive growth. Sumit Gupta, co-founder and CEO of CoinDCX, revealed that the exchange witnessed a near tenfold surge in new user registrations. In just under 50 days after the verdict, CoinDCX onboarded over 50,000 new users—a clear signal of renewed market confidence.

Transaction volumes also saw a significant uptick. The BTC/INR trading pair experienced a 78.36% increase in trading volume within the same period, reflecting stronger demand for direct fiat-crypto trading pairs now that banking channels are reopened.

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This resurgence isn't limited to one platform. Industry-wide data suggests a broad revival of interest in digital assets among Indian retail investors, developers, and fintech innovators.

Driving Forces Behind the Boom

Several factors are fueling this renewed momentum in India’s crypto ecosystem.

First, according to Ajeet Khurana, former CEO of Zebpay—one of India’s earliest crypto exchanges—many traders who had exited the market during the ban have now returned. However, he cautions that this initial wave represents re-engaged users rather than fresh capital inflows. “If we were seeing truly new investment,” Khurana notes, “we’d expect to see a sharper rise in cryptocurrency prices. Bitcoin would likely be trading at much higher levels.”

Second, the ongoing global pandemic has played an indirect but powerful role. With millions of Indians under lockdown due to COVID-19, more people have found time to explore alternative investment avenues using their computers and mobile devices. Online trading—especially in volatile yet high-potential markets like cryptocurrencies—has become increasingly attractive.

Moreover, central banks worldwide have responded to economic slowdowns with unprecedented monetary easing policies, including massive quantitative easing and near-zero interest rates. These actions have raised concerns about inflation and currency devaluation.

Gupta emphasizes that investors are becoming aware of the declining purchasing power of the rupee amid global money printing. “Not just in India but globally,” he says, “people are realizing that holding cash may no longer be safe. A small but growing segment is shifting part of their portfolios into cryptocurrencies as a hedge.”

Crypto vs. Gold: The Inflation Hedge Debate

Some advocates have begun positioning cryptocurrencies—particularly Bitcoin—as modern alternatives to traditional safe-haven assets like gold. Both are seen as stores of value outside conventional financial systems.

However, Khurana argues that Bitcoin has yet to achieve true safe-haven status. Unlike gold, which often moves inversely to stock markets during crises, Bitcoin has shown strong correlation with equities in recent downturns—suggesting it still behaves more like a risk asset than a defensive one.

“For crypto to become a real inflation hedge,” Khurana explains, “we need deeper market participation and larger institutional inflows. Liquidity must grow by several orders of magnitude before it can rival gold’s stability.”

Still, the narrative of digital scarcity—Bitcoin’s fixed supply cap of 21 million coins—resonates with investors worried about fiat devaluation. As awareness spreads, more Indians may begin allocating small portions of savings into crypto as part of diversified strategies.

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Regulatory Uncertainty Looms

Despite the Supreme Court’s favorable ruling, legal ambiguity remains. While the court invalidated RBI’s banking restrictions, it did not declare cryptocurrencies legal tender or provide a regulatory framework for their use.

In fact, a government-backed bill drafted in 2019—the Banning of Cryptocurrency and Regulation of Official Digital Currency Bill—proposed criminalizing private cryptocurrency ownership. Though not yet passed into law, its mere existence creates uncertainty for investors and businesses alike.

Industry leaders are calling for clear, balanced regulations that protect consumers while fostering innovation. Many suggest a model similar to securities or commodities oversight, which could legitimize exchanges and bring institutional players into the fold.

Until such clarity emerges, traders and investors must navigate a complex landscape where progress coexists with risk.

Looking Ahead: Building a Sustainable Crypto Future

India’s crypto journey is far from over. With over 500 million internet users and a young, tech-savvy population, the country holds immense potential for blockchain and digital asset adoption.

Educational initiatives, improved user interfaces, and stronger cybersecurity measures will be crucial in onboarding the next wave of users—especially those outside major urban centers.

Additionally, integration with decentralized finance (DeFi), non-fungible tokens (NFTs), and real-world use cases like remittances and micropayments could further drive utility beyond speculation.

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Frequently Asked Questions (FAQ)

Q: Is cryptocurrency legal in India?
A: As of now, owning or trading cryptocurrencies is not illegal. The Supreme Court lifted the RBI’s banking ban in 2025, but there is no comprehensive legal framework yet. A proposed bill could impact future legality.

Q: Can I buy Bitcoin with Indian Rupees?
A: Yes. After the banking restrictions were overturned, major exchanges like CoinDCX and others reintroduced INR deposit and withdrawal options, enabling direct BTC/INR trading.

Q: Are profits from crypto trading taxable in India?
A: While tax guidelines are still evolving, any gains from selling digital assets may be subject to capital gains tax. Investors should consult a tax professional for compliance advice.

Q: What risks do Indian crypto investors face?
A: Key risks include regulatory uncertainty, price volatility, cybersecurity threats, and lack of investor protection compared to traditional financial instruments.

Q: How has the pandemic affected crypto adoption in India?
A: Lockdowns and increased digital engagement have led more people to explore online investing. Combined with economic fears and low interest rates, this has boosted interest in alternative assets like crypto.

Q: Could India introduce its own central bank digital currency (CBDC)?
A: Yes. The RBI has expressed interest in launching a digital rupee. Such a move could coexist with private cryptocurrencies if properly regulated.

Core Keywords:

India stands at a crossroads. With judicial support secured and public interest rising, the stage is set for responsible innovation—if policymakers choose to embrace it.