RBI Stays Cautious on Crypto but Backs Blockchain and Tokenisation: What It Means
The Reserve Bank of India (RBI) said India will continue its cautious approach towards cryptocurrencies. The Governor spoke at the 5th Kautilya Economic Conclave in New Delhi (held 3 to 5 October 2026, organised by the Institute of Economic Growth with the Ministry of Finance).
At the same time, the RBI said it supports the technology behind crypto: distributed ledger technology (DLT) and tokenisation. It is already using some of these tools, both inside the central bank and with private partners through the public-private partnership (PPP) model.
The RBI's worries about crypto are about monetary sovereignty (a country's control over its own money), monetary policy and capital flows (money moving in and out of the country). It linked this to the idea of the "singleness of money": one rupee must always be worth one rupee, whoever issued it.
The RBI said domestic payments in India are already fast, cheap and convenient (thanks to systems like UPI). The real problem is cross-border payments, and for that, central bank digital currencies (CBDCs) and other options can be explored.
On global bond markets, the RBI said bond yields are rising because money is scarce while spending by governments and private companies has gone up, including large spending on artificial intelligence (AI). Global interest rates affect India too, for example through real interest rates inside the country.
Cryptocurrency: How It Works and India's Regulatory Approach
A cryptocurrency is a kind of digital money that is not issued by any government or central bank. It exists only as entries in a shared computer record called a blockchain, kept by thousands of computers around the world. Bitcoin is the most famous example. In India, the law calls crypto and similar items virtual digital assets (VDAs). India taxes them heavily and watches them for money laundering, but has not made them legal tender, and has not passed a full law to regulate them either.
The RBI has repeated its long-standing position: it will not encourage private cryptocurrencies, because they threaten India's control over its own money, its interest rate policy and its capital controls. At the same time, it has separated the coin from the technology, saying it backs DLT and tokenisation. That is why it pointed to CBDCs, not crypto, as the answer for cross-border payments.
Tokenisation of Financial Assets
Tokenisation means turning the ownership of a real asset, like a government bond, a share, a bank deposit or a piece of land, into a digital token recorded on a shared digital ledger. The token works like a digital certificate of ownership. It can be bought, sold or transferred almost instantly, and the record updates for everyone at once. It is the main "underlying technology" use that central banks, including the RBI, support even while being cautious about cryptocurrencies.
When the RBI says it backs the "underlying technology" of crypto, tokenisation on distributed ledgers is what it means. Platforms like the Unified Markets Interface and the wholesale e₹ let India use the speed and programmability of DLT while keeping central bank money at the centre. This lets India gain the benefits of the technology without accepting private cryptocurrencies.
Central Bank Digital Currency (CBDC) and India's Digital Rupee (e₹)
A Central Bank Digital Currency is money issued by a central bank in digital form. In India it is called the digital rupee or e₹, issued by the RBI. It is legal tender and as safe as a paper note, because it is a direct promise of the RBI. India runs two versions: a wholesale e₹ for banks and a retail e₹ for the public.
The RBI pointed to CBDCs as the right answer for cross-border payments, instead of private cryptocurrencies or stablecoins. Because a CBDC is issued by the central bank, it keeps the "singleness of money" and India's monetary sovereignty intact, which are the very things the RBI fears crypto would weaken.
- Venue: 5th Kautilya Economic Conclave, New Delhi, 3 to 5 October 2026 (Institute of Economic Growth with the Ministry of Finance)
- RBI concerns about crypto: monetary sovereignty, monetary policy, capital flows, singleness of money
- RBI supports: distributed ledger technology and tokenisation, used inside the RBI and through PPP mode
- Domestic payments seen as fast and cheap; cross-border payments are the main challenge, where CBDCs can help
- Crypto tax in India: 30% on gains, 1% TDS, no loss set-off (now under the Income-tax Act, 2025)
- VDA service providers under PMLA since 7 March 2023
- Supreme Court struck down RBI's 2018 crypto banking curbs on 4 March 2020 (IAMAI v. RBI)
- Rising global bond yields linked to higher government and private spending, including on AI