The Reserve Bank of India is making its move again. According to a report from The Economic Times, the RBI presented its position to Parliament’s Standing Committee on Finance this week, and it’s pretty clear: banks should stay away from crypto.
RBI Deputy Governor Rohit Jain and Executive Director P. Vasudevan laid out the central bank’s case. They reportedly said prohibition is still on the table as a policy option, and recommended blocking crypto from being used in payments and settlements while restricting banking-sector exposure.
The central bank warned that treating crypto like regular financial products could create a false sense of safety. But here’s the nuance — they told lawmakers to make sure tokenized government securities and corporate bonds don’t get caught in the same net. Regulated tokenization should be fine.
This echoes what the RBI tried back in 2018, when it directed banks to cut off services to crypto businesses. That effectively choked exchanges without making crypto ownership illegal. The Supreme Court overturned that move in 2020, ruling the ban wasn’t proportionate since the RBI hadn’t shown actual harm.
India still tops Chainalysis’ global crypto adoption rankings for 2025. The RBI apparently questioned the methodology, but the numbers speak for themselves.
The June 2021 clarification from the RBI told banks they couldn’t use the old circular anymore, but reminded them they could still apply KYC, AML, and forex rules. This new push feels like trying a different approach — containment through legislation instead of banking bans.
