India’s central bank urges crypto ban over tax, stability risks
6.6 Regulation India’s central bank seeks a ban on private cryptocurrencies, citing risks to financial stability and tax evasion, while authorities struggle with enforcement and underreported crypto income.
India's central bank has renewed its call for a ban on private cryptocurrencies. The Reserve Bank of India (RBI) recommends that banks and financial institutions be prohibited from holding, trading, or gaining exposure to digital assets and privately issued stablecoins. The RBI argues these steps are essential to safeguard financial stability and maintain monetary sovereignty. It warns that private digital assets could undermine control over payment flows and capital movement. Internal government documents show the RBI believes regulating crypto would be difficult and could legitimize the sector, making it systemic. India's tax department has also raised concerns about tax evasion, noting that fewer than a quarter of crypto traders reported their transactions in the 2022–23 financial year. Offshore exchanges and private wallets further complicate enforcement and tax recovery. Despite nearly 39 million crypto investors in India, the RBI maintains its cautious-to-hostile stance, continuing a decade-long approach.
