The Supreme Court of India ruled that the Central Bank's ban on encryption is unconstitutional, leading to a surge in local volume.

The Supreme Court of India recently made an important ruling, declaring that the cryptocurrency ban imposed by the Central Bank of India in 2018 was unconstitutional. This ruling immediately created a huge wave in the Indian crypto assets market, with many exchanges experiencing a surge in volume.

In April 2018, the Reserve Bank of India issued a notice to all banks and financial institutions, prohibiting them from providing services for virtual currency-related businesses, effectively cutting off the channel between Crypto Assets and fiat currency. This ban dealt a heavy blow to the Indian Crypto Assets industry, forcing many exchanges to shut down and leading to a significant contraction in market volume.

Taking Koinex as an example, the exchange recorded a monthly volume of $265 million at the end of 2017, but after the ban was imposed, the volume continued to decline, and it ultimately announced the cessation of operations in June 2019. At that time, its daily volume had fallen to less than 24 bitcoins.

The recent ruling by the Supreme Court means that local exchanges in India can reopen fiat deposit and withdrawal channels. The market responded positively, with several exchanges experiencing a rapid increase in volume. One exchange's 24-hour volume surged from $750,000 to $5.33 million, a staggering increase of 6 times. Another exchange also saw its trading volume double.

However, the growth of fiat currency trading pairs is not significant. Data shows that fiat currency trading currently accounts for only 0.1% of the total volume on a certain exchange. This indicates that investors remain cautious about policy changes.

Several industry insiders have stated that this ruling could become a catalyst for the transformation of the Indian Crypto Assets industry. Some exchanges integrated fiat deposit and withdrawal functions within 6 hours after the ruling. However, the Indian government had previously planned to fully ban Crypto Assets, and the future direction of regulation remains uncertain.

Overall, despite the bullish sentiment in the Indian market, global investors are relatively cautious about the policy changes. The market generally believes that whether India can attract large-scale funding for Crypto Assets remains to be seen. The future regulatory attitude of the Indian government will be a key factor in determining the market direction.