India’s RBI maintains stance on crypto despite Supreme Court directive, reaffirming its cautious position on digital assets. RBI Governor Sanjay Malhotra confirmed that no change has been made in the central bank’s approach, even after the Supreme Court’s latest remarks on regulatory delays.
At a recent policy briefing, Malhotra stated that the Reserve Bank of India remains consistent in its views on cryptocurrencies. He pointed out that a government committee is currently examining the broader regulatory landscape. Still, the central bank continues to view crypto as a risk to the country’s financial and monetary stability. The RBI has long held that the unregulated nature of virtual currencies could pose serious systemic risks.
Supreme Court highlights regulatory inaction
The Supreme Court expressed frustration over the government’s delay in introducing a legal framework for digital assets. This criticism arose during a bail hearing for an individual arrested for illegal Bitcoin trading. The judges described cryptocurrency trading as a complicated version of hawala and questioned the absence of regulations despite earlier requests for clarity. They also indicated that clear laws would prevent legal confusion and protect individuals who might unknowingly engage in unlawful transactions.
Justices Surya Kant and N Kotiswar Singh reminded the government that the court had raised the issue two years ago, yet no progress had been made. They argued that the lack of follow-through has allowed continued legal ambiguity around digital currency use in India.
RBI outlines future regulatory roadmap
Though the RBI has maintained a restrictive stance, it has introduced a new framework to regulate digital assets in India. The proposed approach involves three core elements including stakeholder consultations, impact assessments using qualitative metrics, and periodic reviews to align with market developments.
Although there are no particular laws on cryptos, the government has added hefty taxes to crypto activities. The current system in Canada requires traders to pay 30 percent tax on their earnings and an extra 1 percent tax deducted right at the time of big deals. Due to these steps, crypto market growth has slowed down and lots of fraud, theft and abductions have happened because of cryptocurrency scams.
Legal uncertainty continues despite court ruling
Even after the Supreme Court voided the 2018 RBI ruling on crypto, penal actions against people who trade in digital currencies are still being pursued. Because of this situation, people are less likely to trust and accept the industry. With this process still ongoing, the RBI says that caution is needed and that it is still concerned about financial risks from unregulated digital assets.