India's central bank is pushing the government toward a crypto policy that "leans towards prohibition," according to a Reuters report. The Reserve Bank of India has long argued that private cryptocurrencies pose risks to financial stability and monetary sovereignty, and is now pushing that view at the policy-drafting stage.
Why it matters
India is one of the largest retail crypto markets globally, with active user bases measured in the tens of millions. An outright prohibition would cut off a major demand pool for $BTC and $ETH, and would also force Indian exchanges and offshore venues serving Indian users to wind down or relocate. The framing as "prohibition" rather than "regulation" signals the RBI wants the harder option on the table before any formal cabinet discussion.
Market impact
Indian rupee-denominated crypto trading volumes already operate in a heavy tax shadow after the 2022 30% flat levy on crypto gains and the 1% TDS on transfers. A ban would deepen that contraction. Watch for ripple effects on regional liquidity and on offshore venues that have built Indian rails.
Frequently asked questions
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What did the RBI say about Indian crypto policy?
The Reserve Bank of India is pushing the government toward a crypto policy that "leans towards prohibition," according to a Reuters report, framing the stance as a hard block rather than regulation.
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Why is the RBI opposed to cryptocurrency?
The RBI has long argued that private cryptocurrencies pose risks to financial stability and monetary sovereignty, and is now pressing that view at the policy-drafting stage.
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How large is India's crypto market?
India ranks among the world's largest retail crypto markets, with active user bases measured in the tens of millions, making any ban a major demand-side event for $BTC and $ETH.
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What crypto taxes already apply in India?
India imposed a 30% flat tax on crypto gains in 2022 along with a 1% TDS on transfers, already weighing on rupee-denominated trading volumes before any ban discussion.
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What happens to Indian crypto exchanges under a ban?
An outright prohibition would force Indian exchanges to wind down or relocate, and would also pressure offshore venues that have built rails for Indian users.
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