The Reserve Bank of India (RBI) reportedly backed a containment strategy for digital assets to shield banks and other financial institutions from exposure to crypto and privately issued stablecoins, as lawmakers prepare a report on the country\u2019s digital asset policy.\u00a0<\/p>\n
According<\/a> to a report by The Economic Times, RBI Deputy Governor Rohit Jain and Executive Director P. Vasudevan presented the central bank\u2019s position to the Parliamentary Standing Committee on Finance on Thursday. <\/p>\n In a background note submitted to the panel, the RBI reportedly said prohibition remained a recognized policy option and recommended preventing the use of crypto in payments and settlements while restricting banking-sector exposure.<\/p>\n The central bank reportedly warned that applying traditional regulation to crypto could legitimize speculative assets and create a false perception of safety among users. However, it urged policymakers to distinguish crypto from tokenized government securities, corporate bonds and other regulated financial instruments so that restrictions would not hinder tokenization.\u00a0<\/p>\n<\/p>\n Chainalysis\u2019 2025 Global Crypto Adoption Index. Source: Chainalysis<\/em><\/p>\n India ranked<\/a> first in Chainalysis\u2019 2025 Global Crypto Adoption Index, although the RBI reportedly challenged the methodology behind private-sector adoption rankings.<\/p>\n The RBI\u2019s latest reported proposal echoes an approach it took in 2018, when the central bank directed<\/a> regulated financial institutions to stop dealing in crypto or providing services to individuals and businesses involved in them. <\/p>\n The approach effectively cut off crypto exchanges from India\u2019s banking system without prohibiting individuals from owning or trading crypto.<\/p>\n India\u2019s Supreme Court overturned<\/a> the circular in March 2020, following a challenge brought by exchanges and the Internet Mobile Association of India. The court recognized the RBI’s authority to take preventive action but found that the measure failed the test of proportionality, noting that the central bank had not shown harm suffered by entities it regulated.\u00a0<\/p>\n Related: <\/strong><\/em>India arrests Darwin Labs co-founder in GainBitcoin scam probe<\/strong><\/em><\/a><\/p>\n In May 2021, the RBI clarified<\/a> that banks could no longer cite the invalidated circular when cautioning customers against crypto transactions. However, it said regulated institutions could continue applying know-your-customer, anti-money laundering and foreign-exchange compliance requirements.\u00a0<\/p>\n Magazine: <\/strong><\/em>Bitcoin decouples from tech stocks, Ether eyes \u2018selling wave\u2019: Market Moves<\/strong><\/em><\/a>\u00a0<\/p>\n Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph\u2019s Editorial Policy<\/a> and aims to provide accurate and timely information. Readers are encouraged to verify information independently. <\/p>\n","protected":false},"excerpt":{"rendered":" The Reserve Bank of India (RBI) reportedly backed a containment strategy for digital assets to shield banks and other financial institutions from exposure to crypto and privately issued stablecoins, as lawmakers prepare a report on the country\u2019s digital asset policy.\u00a0 According to a report by The Economic Times, RBI Deputy Governor Rohit Jain and Executive 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PLUG<\/a>","rttpg_excerpt":"The Reserve Bank of India (RBI) reportedly backed a containment strategy for digital assets to shield banks and other financial institutions from exposure to crypto and privately issued stablecoins, as lawmakers prepare a report on the country\u2019s digital asset policy.\u00a0 According to a report by The Economic Times, RBI Deputy Governor Rohit Jain and Executive…","_links":{"self":[{"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/posts\/32780","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/comments?post=32780"}],"version-history":[{"count":1,"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/posts\/32780\/revisions"}],"predecessor-version":[{"id":32782,"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/posts\/32780\/revisions\/32782"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/media\/32781"}],"wp:attachment":[{"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/media?parent=32780"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/categories?post=32780"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/design-providers.com\/rise\/wp-json\/wp\/v2\/tags?post=32780"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}RBI renews push to isolate crypto from banking<\/h2>\n