India's central bank revives push to isolate banks from crypto: Report
The RBI is reportedly urging a containment approach for digital assets to protect banks and other financial institutions from crypto and privately issued stablecoins. In a note to a parliamentary finance panel, it said prohibition remains a valid policy option and recommended blocking crypto use in payments and settlements while limiting banking-sector exposure. It warned that applying standard regulation could legitimize speculative assets and mislead users about safety. At the same time, it called for separating crypto from tokenized government securities, corporate bonds, and other regulated instruments so tokenization is not constrained. This stance echoes the RBI’s 2018 effort to keep regulated banks away from crypto, which effectively cut off exchanges from banking access until India’s Supreme Court struck the circular down in 2020 as disproportionate. The RBI still supported KYC, AML, and foreign-exchange compliance for regulated institutions.
