RBI Closely Monitoring Global Cryptocurrency Developments as India Prepares Crypto Policy Paper
By Jatin Takkar, ET Bureau | Last Updated: July 11, 2025, 06:00 AM IST
The Reserve Bank of India (RBI) is intensifying its focus on global cryptocurrency trends amid India’s ongoing deliberations on a comprehensive cryptocurrency policy paper. Governor Sanjay Malhotra recently informed a parliamentary committee that the RBI remains vigilant about international crypto developments, especially given the recent shift in stance by former US President Donald Trump, who has moved from skepticism to actively championing cryptocurrencies.
Global Crypto Developments and US Influence
The resurgence of cryptocurrency has garnered renewed attention partly due to Trump’s pivot. During his time in office, the US initiated plans to establish a bitcoin reserve and considered pro-crypto legislation, signaling a significant policy shift that has rippling effects worldwide. India’s central bank is closely tracking such global movements as it assesses its own regulatory stance and strategic direction on digital assets.
India’s Upcoming Cryptocurrency Policy Paper
Sources familiar with the matter revealed that India is preparing to release a detailed policy paper on cryptocurrencies, pending approval from the highest levels of government. Governor Malhotra described the document as a "work in progress" during his briefing to the parliamentary standing committee on finance, chaired by BJP MP Bhartruhari Mahtab. The paper aims to clarify India’s position on cryptocurrencies and provide guidance on managing this rapidly evolving sector.
RBI’s Concerns and the Role of UPI
Despite growing global enthusiasm, the RBI continues to express reservations about private cryptocurrencies, highlighting concerns around financial stability, potential misuse for money laundering and terrorist financing, and the challenges they pose for effective monetary policy. Governor Malhotra emphasized that within India, the need for such cryptocurrencies is mitigated by the success of the Unified Payments Interface (UPI), which has effectively facilitated digital transactions across the country.
Central Bank Digital Currency (CBDC) Development
In parallel, the RBI is actively developing its own Central Bank Digital Currency (CBDC) to offer a safer and government-backed digital alternative. This move aligns with global trends where central banks seek to leverage digital currency technology while managing associated risks.
Regulatory Framework and Taxation
India currently does not recognize cryptocurrencies as legal tender but enforces a 30% tax on gains from virtual digital assets. Additionally, cryptocurrency exchanges operating within the country are mandated to register with the Financial Intelligence Unit to enhance monitoring and regulatory compliance.
Economic Outlook and Other Updates
During the presentation to the finance panel, the RBI highlighted India’s poised status as the fastest-growing major economy in the fiscal year 2025-26 (FY26), projecting GDP growth in line with international expectations. The central bank also flagged risk factors such as global financial market volatility and geopolitical tensions that could impact inflation outlooks.
Addressing a question regarding the discontinued Rs 2,000 currency notes, Malhotra clarified that while the notes have not been declared invalid, they are no longer being circulated or printed, referencing the RBI’s withdrawal announcement made in May 2023 as part of measures against black money.
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Related Topics:
- Reserve Bank of India
- Cryptocurrency Developments
- Central Bank Digital Currency (CBDC)
- Crypto Regulation in India
- Financial Stability
This article is part of ongoing coverage on India’s economic policies and global financial trends by The Economic Times.