India has announced plans to introduce a digital currency backed by the Reserve Bank of India (RBI), reinforcing its broader effort to curb the use of unregulated cryptocurrencies.
According to local media reports on October 7, Union Minister Piyush Goyal reaffirmed the government’s stance, emphasizing that India does not support crypto assets lacking sovereign or asset-based backing.
“We have not been encouraging cryptocurrency which does not have sovereign backing or which is not backed by assets,” Goyal said.
He added that the RBI-issued digital currency aims to modernize financial transactions, reduce dependence on cash, and provide a more efficient and traceable alternative to traditional payment systems.
While India has stopped short of an outright ban on private cryptocurrencies, it continues to discourage their use through heavy taxation. Goyal reiterated that the aggressive tax policy is designed to limit adoption due to the risks tied to unregulated digital assets.
“We are taxing it (cryptocurrency) very heavily,” he said, noting that the goal is to prevent individuals from holding unbacked assets without accountability if issues arise.
India’s cautious crypto stance persists amid policy uncertainty
Goyal’s remarks reaffirm India’s long-standing cautious approach toward the crypto sector. Despite leading the world in crypto adoption in 2025, the country’s regulatory direction remains restrictive.
Although the Supreme Court overturned the RBI’s crypto banking ban in 2020, the absence of clear follow-up regulations has left the industry in continued limbo. The central bank, meanwhile, has maintained its hardline view, warning that private cryptocurrencies could undermine monetary stability and erode regulatory control.
Reports suggest that India is unlikely to introduce comprehensive crypto regulations, as officials fear such a move could legitimize the sector and expose the financial system to systemic risks. At the same time, policymakers acknowledge that a total ban would likely fail to stop peer-to-peer and decentralized crypto activity.
Authorities have also raised concerns over stablecoins, viewing them as a potential threat to India’s Unified Payments Interface (UPI) and the broader payments ecosystem. Still, foreign exchanges continue to operate under strict anti–money laundering (AML) compliance, with high crypto taxes serving as a significant deterrent to widespread activity.
