What does the Supreme Court order reinstating virtual currency activities mean?

The story so far: On Wednesday, March 4, a three-judge Bench of the Supreme Court of India struck down a 2018 circular of the Reserve Bank of India, which sought to prevent banks and institutions from dealing in “virtual currencies” — also referred to as cryptocurrencies, an example being Bitcoin — and providing services to those engaged in trading in such currencies. The petitioners questioned the RBI’s power in prohibiting trading in virtual currencies; they wondered how the RBI could propose an outright ban when all other stakeholders such as the Department of Economic Affairs, the Securities and Exchange Board of India, Central Board of Direct Taxes, among others, had batted for a regulatory regime; they also challenged the circular on the grounds of lack of proportionality. This can be understood by how the RBI defined virtual currencies in 2013, which the Court said was perhaps the first time it took note of “technology risks in changing business environment”. The RBI defined such currency, the Court order notes, “as a type of unregulated digital money, issued and controlled by its developers and used and accepted by the members of a specific virtual community”.