India is the only country in the world where it is legal to trade cryptocurrencies.
On Monday, the Supreme Court granted a relief to Indian Prime Minister Narendra Modi as he sought to prevent banks from suspending cryptocurrency trading.
The court has also ordered that cryptocurrency exchanges must not be allowed to fail.
According to the ruling, the government has granted the exemption for cryptocurrency trading in an effort to stop banks from issuing a notice to the exchanges that they would be unable to operate.
The court said the exemption was intended to help facilitate cryptocurrency exchanges to expand their business.
In October, a group of banks filed a petition in the Supreme Courts seeking the government’s order to halt cryptocurrency trading and the government should also ban cryptocurrency exchanges.
The government, however, has not taken any action to implement the court’s order, which it has already given to the banks, a person familiar with the matter told Reuters.
The Supreme Court has also said it is “prepared to take action” against financial institutions that have failed to comply with the ban, the person said.
A person familiar who requested anonymity said that the government will be looking at various steps, including banning cryptocurrency exchanges and asking them to close down.
The decision has come as a surprise to some traders, who believe that banks will not be able to stop cryptocurrency trading, and that the banks may have to issue a notice or fines to cryptocurrency exchanges, which are expected to expand in the coming months.