RBI Resists Pressure for Clarity on Crypto India’s crypto policy remains uncertain as RBI Governor Sanjay Malhotra reaffirmed the central bank’s resistance to digital assets. The central bank’s stand was reasserted by Malhotra during a press conference, citing the danger that cryptocurrencies present to monetary policy and financial stability. “We continue to be concerned with respect to the potential risks crypto poses to monetary policy and financial stability,” Malhotra said. Though a government committee continues to consider possible policy frameworks, the central bank has said it would not support legalization or implementation of private cryptocurrencies. Policy Pressure from the Supreme Court India’s Supreme Court has also been more forceful, urging the government to provide regulatory clarity. A bench led by Justices Surya Kant and N Kotiswar Singh recently stated that complete ban was no longer possible given what is being observed on a worldwide basis. The judges found fault with the lack of a clear framework, warning that continued uncertainty puts consumers at risk and stifles innovation. The final discussion paper is to be released in June 2025, but industry players are not hopeful about progress. Regulatory Back-and-Forth Since 2018 India’s rocky past with crypto began in 2018 when the RBI disallowed banks from supporting crypto business. The Supreme Court in 2020 overruled that ban on the basis of constitutional rights violations. That comfort was short-lived, with no permanent regulatory framework to replace it. Even after the court ruling, RBI continued to raise many objections. Governor Shaktikanta Das has made many statements labeling cryptocurrencies as a “clear danger” to economic stability and has asked for a complete ban. High Taxation, Unclear Future India implemented one of the world’s toughest tax regimes in 2022—imposing a 30% tax on crypto gains and a 1% tax deducted at source (TDS) on transactions. These regulations, combined with regulatory uncertainty, have held back local crypto activity. As a framework is being discussed, the RBI stance and lack of political urgency have left India’s crypto future uncertain. Stakeholders are holding out for the next discussion paper, but doubts run high that anything significant will materialize anytime soon.
