RBI reiterates support for crypto curbs as tax department flags USD 2 billion in unmonitored holdings
09/07/2026
new delhi, JUl 8: The Reserve Bank of India (RBI) has reiterated its support for a cryptocurrency policy ‘leaning towards prohibition’, while the nation’s tax authority cautioned that trading through offshore exchanges is difficult to monitor, as per the official documents.
Although the government has not yet implemented a policy to prohibit or control virtual digital assets, the documents show that important government agencies desire to impose stricter restrictions on them.
India has permitted them to exist in a grey area since a court in 2018 overturned RBI laws that essentially outlawed cryptocurrencies.
A draft paper on the subject has been continually postponed, and a 2021 draft law to outlaw private cryptocurrencies was never presented in Parliament. The government has postponed enacting a formal policy on virtual assets, stating that any strategy should defend financial stability, monetary sovereignty, and consumer losses while striking a balance between innovation and risk management. Meanwhile, after consulting with RBI, India’s finance ministry supported limited regulatory clarity for virtual assets in internal discussions in September, claiming that the asset class’ risk factors had been mitigated by current tax and other legislation.
According to the documents, key authorities are worried about the increasing risk to the nation’s financial stability as cryptocurrencies are still traded without regulations. Following regulatory developments in the US, where legislation supporting the wider use of stablecoins has fuelled anticipation of further use, cryptocurrencies have been more widely accepted. China has outlawed the usage of cryptocurrency tokens, while nations like Singapore and Japan have taken steps to regulate them. According to estimates from the tax department, there were over 39 million cryptocurrency dealers in India at the end of May, holding roughly USD 2.1 billion in digital assets, despite the country’s unclear policies.
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