The RBI's 2018 crypto "ban" was a circular dated 6 April 2018. It didn't make owning Bitcoin illegal. It directed the banks and other entities the RBI regulates not to deal in virtual currencies, or provide services to anyone who does, and gave them three months to exit existing relationships. For Indian crypto exchanges, that meant losing their bank accounts.
The Supreme Court set the circular aside on 4 March 2020. In between were two of the hardest years of my working life. I'm a co-founder of Unocoin, India's first Bitcoin platform, and this is what that period looked like from inside. For the legal sequence with the documents, see our Supreme Court page. This post is the human side.
What the circular said
The circular, issued on 6 April 2018, was short and clear in its effect. Entities regulated by the RBI, which includes the banks, were told not to deal in virtual currencies or provide services to any individual or business dealing in or settling them. Those already providing such services were to exit the relationships within three months.
Notice what it didn't say. It didn't say an individual couldn't own Bitcoin. It didn't shut any exchange directly. It went for the rails underneath: if no bank would serve you, you couldn't take rupee deposits or pay out rupee withdrawals. For an exchange, banking is oxygen.
It wasn't the first warning
We'd seen the RBI's caution before. A couple of weeks after we launched in December 2013, the RBI posted a notice on its website, a "buyer beware" warning to the public about the risks of virtual currencies. That same kind of notice came a second time a few years later. Each time, we had to work to rebuild trust and keep going.
The third time, in 2018, was different. It wasn't a warning to the public. It was an instruction to the banks.
When the clock started
The circular gave regulated entities three months. From that day, every Indian exchange depended on bank accounts to move rupees, and now every bank had a deadline to close them. The question wasn't whether our accounts would go. It was what we could save in the time we had.
Running a company in this industry has always meant that the world can feel like it's against you: the government, the banks, investors, hackers, sometimes even customers. In 2018, it felt like all of them at once.
Laying off a hundred people
We had to lay off about a hundred people in 2018, just to survive.
I want to say that plainly, because founder stories tend to skip it. These were people who had joined to build something new for India. They weren't let go because they did anything wrong. They were let go because the company's access to the banking system was being taken away, and without it, there was no way to pay for a team that size.
If you were one of those people, you were part of why Unocoin survived. The decisions we made in those months are the reason the company was still standing when the judgment came.
Everyone else left. Why we stayed
Most of the industry didn't stay. Companies left India, pivoted or shut shop. I don't say that to criticise anyone. Those were rational decisions for many businesses, and I understand them.
My co-founders Harish and Sathvik made a different decision. They decided to fight the RBI in court. That's not a small decision for a company that has just laid off about a hundred people. Legal fights are slow, expensive and uncertain, and we were up against the central bank.
We had been India's first Bitcoin exchange in 2013. If the companies that built this industry walked away, the question of whether a total banking cut-off was fair would never be tested. Harish and Sathvik chose to test it. We took the RBI to court in 2018, and we're still very proud of how that ended.
What customers went through
For customers, the circular meant uncertainty. When exchanges lose banking, rupee deposits and withdrawals get harder, and nobody can give a confident answer about when things will normalise. Each customer had to decide whether to sell, move their Bitcoin to a wallet of their own, or wait.
That period is one reason I'm so firm about a few habits today. Know how to move your Bitcoin to a wallet you control. On Unocoin you can do that anytime with zero-fee transfers. Keep records of what you bought and when. And understand that crypto products are unregulated in India and can be highly risky, and that there may be no regulatory recourse for any loss. Those aren't lines we add for compliance. They're what 2018 taught us.
How it ended
The Internet and Mobile Association of India challenged the circular in the Supreme Court, and Unocoin was part of the case. On 4 March 2020, in Internet and Mobile Association of India v. Reserve Bank of India, a three-judge bench set the circular aside.
The Court accepted that the RBI has the power to regulate in this area. But it held that a total banking cut-off was disproportionate, because the RBI hadn't shown that crypto activity had harmed the entities it regulates. Banks could serve crypto businesses again.
The judgment did not make crypto official currency, and it did not create a regulatory framework. That came later through tax, with the Finance Act 2022, and anti-money-laundering law, when VDA service providers came under the PMLA in March 2023. Unocoin is registered with FIU-IND as a reporting entity under the PMLA.
What it means for you today
People still search "is Bitcoin banned in India?" because of 2018. The short answer today: buying, holding and selling Bitcoin is not banned. The banking cut-off was set aside in 2020. Crypto is taxed and unregulated as an asset, and platforms must register with FIU-IND.
In practice, that means a few things for a first-time buyer. Use a platform that is registered with FIU-IND and does KYC properly. Expect 1% TDS to be deducted on sales above the threshold, and a flat 30% tax plus 4% cess on gains, with no set-off of losses. Keep your records. The India crypto tax guide explains each rule in plain words, and a CA can tell you how they apply to you.
And remember why 2018 happened at all: the system around crypto can change faster than the asset does. Learn how to hold your own keys, even if you never use them.
What I took from it
Three things have stayed with me.
First, survival is a decision you make early. Cutting deep was painful, and it's the only reason there was a company left to win in court.
Second, fight through proper channels. Our fight was in court, in public, with documents anyone can read. That's why the result has held.
Third, never build on rails you don't understand. The circular didn't touch Bitcoin. It touched the banks. Every business, and every customer, should know what they depend on.
The full sequence, with links to the RBI circular and the judgment, is on our Supreme Court page. If you want to understand why Indian crypto platforms work the way they do today, start there.
Common questions
Did the RBI ban Bitcoin in 2018?
Not directly. The 6 April 2018 circular did not ban owning Bitcoin. It directed banks and other entities the RBI regulates not to deal in virtual currencies or provide services to anyone who does, which cut exchanges off from the banking system.
What did the RBI circular say?
It told regulated entities not to deal in virtual currencies or provide services to any individual or business dealing in or settling them, and gave them three months to exit existing relationships.
When was the ban lifted?
On 4 March 2020, when the Supreme Court set the circular aside in Internet and Mobile Association of India v. Reserve Bank of India. The judgment did not make crypto official currency or create a regulatory framework.
Did Unocoin shut down in 2018?
No. Unocoin kept operating, though it had to lay off about a hundred people to survive the loss of banking. It was part of the case that overturned the circular and still operates today.