India Maintains Strict Stance on Cryptocurrencies, Supports Tokenization

The Reserve Bank of India has confirmed that cryptocurrencies pose serious risks; however, distributed ledger technology and tokenization are viewed as promising tools. RBI Governor Sanjay Malhotra expressed this position at an economic conclave in New Delhi, noting that private digital assets could threaten monetary sovereignty, the effectiveness of monetary policy, and capital movement. The regulator believes that the proliferation of private cryptocurrencies and stablecoins could create threats to financial stability. Malhotra also pointed out the risk of violating the principle of "Unity of Money," where different forms of money should remain interchangeable. For cross-border transfers, the RBI suggests using central bank digital currencies (CBDCs) and regulated payment systems. Within India, infrastructure for fast and inexpensive transactions is already operational. The RBI has been warning for several years about the risks of integrating digital assets into the traditional economy and is considering a complete ban on cryptocurrencies.

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