Despite growing pressure from courts and the crypto industry, India’s top financial regulator—the Reserve Bank of India (RBI)—is still holding its ground against cryptocurrencies. While the rest of the world moves forward with digital asset adoption, India’s crypto regulation remains in a state of uncertainty.
RBI Reiterates: “Crypto Is a Risk”
RBI Governor Sanjay Malhotra recently confirmed that the central bank is not ready to welcome private cryptocurrencies. Speaking at a press event, Malhotra emphasized that crypto still poses serious threats to India’s monetary policy and financial stability.
“RBI has maintained a consistent stance on this issue,” he said. “We remain concerned about the potential risks crypto poses to financial stability and monetary policy.”
His statement comes as a government committee continues reviewing policy options. Meanwhile, India’s Supreme Court is pushing for clearer rules, criticizing the government for delaying a comprehensive regulatory framework.
Supreme Court Pushes for Clarity
The legal system is stepping in to demand progress. A Supreme Court bench led by Justices Surya Kant and N Kotiswar Singh recently argued that outright banning cryptocurrencies is no longer practical in a rapidly evolving global financial landscape.
The court highlighted how the lack of regulations has created confusion and discouraged innovation in India’s growing crypto ecosystem.
India is expected to release a policy discussion paper by June 2025, which could finally offer some direction—though the timeline remains uncertain.
A History of Uncertainty
India’s crypto journey has been full of back-and-forth decisions:
In 2018, the RBI banned banks from working with crypto businesses.
In 2020, the Supreme Court struck down the ban, calling it unconstitutional under Article 19(1)(g)—which protects the right to practice any profession or carry out any occupation or business.
Despite the court’s decision, the RBI has continued to oppose private cryptocurrencies in public statements.
Crypto Taxes Remain High
While India has no clear legal framework for crypto, it introduced one of the world’s highest tax regimes in 2022:
30% tax on crypto profits
1% TDS (Tax Deducted at Source) on every transaction
This heavy taxation has slowed down local trading volumes and driven many users to international platforms.
RBI’s Core Concerns
The RBI’s consistent opposition centers around key risks:
Financial instability
Money laundering
Loss of control over monetary policy
Lack of consumer protection
Former RBI Governor Shaktikanta Das previously described cryptocurrencies as a “clear danger” and urged for an outright ban.
What’s Next?
India’s crypto future still hangs in the balance. With the Supreme Court demanding action, and a policy paper expected soon, all eyes are on the government’s next steps.
For now, the RBI says ‘no thanks’—but industry leaders and investors are hoping that pressure from the courts, global trends, and domestic innovation will finally push India toward sensible and structured crypto regulations.
