Key facts
- The Reserve Bank of India (RBI) reportedly proposed a strategy to shield banks from crypto and private stablecoins.
- The RBI advised lawmakers to preserve room for regulated tokenization of financial instruments.
- The central bank warned that traditional crypto regulation could legitimize speculative assets.
- India ranked first in Chainalysis' 2025 Global Crypto Adoption Index, a methodology the RBI reportedly questioned.
- A similar RBI directive in 2018 was overturned by India's Supreme Court in 2020.
The Reserve Bank of India (RBI) has reportedly renewed its efforts to isolate the country's banking sector from cryptocurrencies and privately issued stablecoins. According to The Economic Times, RBI Deputy Governor Rohit Jain and Executive Director P. Vasudevan presented the central bank's stance to the Parliamentary Standing Committee on Finance, advocating for a containment strategy.
The RBI's submission reportedly suggested that prohibition remains a viable policy option and recommended preventing the use of crypto in payments and settlements, while also restricting banking sector exposure. The central bank cautioned that applying traditional regulations to crypto could inadvertently legitimize speculative assets and create a false sense of security among users. However, the RBI also urged policymakers to differentiate between cryptocurrencies and tokenized financial instruments like government securities and corporate bonds to avoid hindering innovation in tokenization.
India was ranked first in Chainalysis' 2025 Global Crypto Adoption Index, although the RBI reportedly questioned the methodology behind these private-sector adoption rankings. This renewed push echoes the RBI's 2018 directive, which effectively barred financial institutions from dealing with crypto-related businesses. That directive was later overturned by India's Supreme Court in March 2020, which found the measure lacked proportionality. In May 2021, the RBI clarified that banks could no longer use the invalidated circular to caution customers against crypto transactions, though they could still enforce KYC, AML, and foreign-exchange compliance.