Bitcoin price surges and exchanges crash as India lifts two-year cryptocurrency ban

Supreme Court ruling is 'historic day, not just for the crypto community, but for the entire country'

Bitcoin was banned in India under an April 2018 central bank order that blocked the trade and circulation of cryptocurrency (Getty Images)

The price of bitcoin has risen sharply and several exchanges have been overloaded after India's Supreme Court overturned a ban on cryptocurrency trading.

The ruling quashed an April 2018 order by the country's central bank that prohibited banks and financial institutions from providing "any service in relation to virtual currencies".

Bitcoin's value rose by around 5 per cent following Wednesday's verdict and has since returned above $9,000 for the first time since last month.

Other cryptocurrencies also received a boost, with ether (Ethereum), XRP (Ripple) and Bitcoin Cash all surging 4-7 per cent in price.

Cryptocurrency businesses and exchanges in the country welcomed the decision, despite some suffering difficulties as a result of their infrastructure being overwhelmed by a sudden increase in demand for their services.

Leading cryptocurrency exchange ZebPay announced that its servers had shut down due to an overload of new users signing up in the hours after the ban was lifted.

"The volume of members and new members logging into ZebPay right now has exceeded our biggest estimates," the exchange wrote on Twitter. "Unfortunately, system is down temporarily while we add more resources."

Sumit Gupta, co-founder and CEO of CoinDCX, described the reversal of the ban as a "historic day, not just for the crypto community, but for the entire country".

Mr Gupta's company was one of four cryptocurrency exchanges in the country that petitioned the Supreme Court to overturn the two-year ban.

"The removal of the ban by the Supreme Court is going to open new opportunities for India in terms of investments, economic growth, financial inclusion, and market maturation," he said.

"We have always seen crypto as a potential to unlock India’s dream of becoming a $5 trillion economy and remain committed to carrying out the hard work which is necessary to make this dream come true."

Indian exchange platform WazirX described the decision as long overdue. "Crypto has won in India," the firm's CEO wrote in a blog post. "Very rarely do we, as a nation, get an opportunity to participate in revolutionary technology".