RBI Reiterates Push for Crypto Ban as Tax Authorities Raise Concerns

India’s Reserve Bank of India (RBI) has renewed its call for a cryptocurrency policy that leans toward prohibition, according to internal government documents reviewed by Reuters. The central bank has recommended preventing banks and financial institutions from holding or dealing in cryptocurrencies and privately issued stablecoins, citing concerns over financial stability, monetary sovereignty, and potential risks to the regulated financial system.

The documents also reveal that India’s tax department has raised concerns about tax evasion linked to cryptocurrency trading. Officials said transactions conducted through offshore exchanges, private wallets, and peer-to-peer platforms are difficult to monitor, making it harder to identify investors and recover taxes. The department also found widespread underreporting of crypto transactions in income tax filings.

Despite the absence of a formal crypto policy, India is estimated to have around 39 million cryptocurrency investors holding more than $2 billion in digital assets. While several countries have introduced regulatory frameworks for digital assets, India continues to weigh tighter restrictions as authorities assess the risks associated with the rapidly growing sector.