The Reserve Bank of India (RBI) has renewed its support for a ban-oriented crypto policy, according to internal government documents seen by Reuters, which show the institution’s continued concern over financial stability, monetary sovereignty and the role of privately issued stablecoins.
RBI wants to keep crypto out of regulated finance:
According to the report, the central bank called for banning banks and financial institutions from holding, trading or any exposure to cryptocurrencies and private stablecoins such as USDT and USDC, seeing the ban as a way to keep digital assets outside the regulated financial system and limit risks.
The bank is also particularly concerned about stablecoins.
Currencies linked to foreign currencies can threaten national monetary sovereignty, while rupee-backed stablecoins can affect government revenues from the issuance of fiat currency and cause financial stability problems in times of stress.
It is worth noting that India has not yet completely banned cryptocurrency trading, but the sector is still in a regulatory gray area. Major credit institutions generally avoid direct exposure to cryptocurrencies after repeated warnings from the central bank, although there is no direct ban on trading digital currencies.
The IRS joins the pressure:
In a separate statement, India’s tax authority warned of the growing difficulty of tracking crypto transactions, particularly when they pass through offshore platforms, peer-to-peer rupee exchanges or from private self-custodial wallets.
The agency found that fewer than 645,000 people who made crypto transactions in 2023 reported them on their tax returns.
India currently imposes a 30% tax on crypto profits, but offshore platforms, valuation discrepancies and ownership ambiguity complicate compliance, officials say.
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