Overview
- Internal government papers from May and June 2026 show the Reserve Bank of India is again calling for a policy that leans toward banning private cryptocurrencies and privately issued stablecoins.
- The RBI wants banks and regulated firms barred from holding, trading or offering exposure to crypto and stablecoins to prevent contagion risks, and most major lenders have already steered clear after repeated central bank warnings.
- India’s Income Tax Department warns that trades on offshore exchanges and peer‑to‑peer platforms are hard to trace, estimating roughly 39 million investors held about $2.1 billion in crypto by May and that fewer than a quarter of active transactors reported gains in FY2022–23.
- No formal legal ban has been enacted and policy remains undecided, with the 2018 banking curbs having been struck down by the Supreme Court and a 2021 draft prohibition bill never tabled in Parliament.
- If regulators press ahead, the likely effects include more crypto activity moving offshore, increased pressure for tougher tax enforcement or new rules such as a central bank digital currency, and a choice for lawmakers between outright restriction and building a regulated framework.