India Remains Cautious on Crypto While Backing DLT and…
By Karthik Subramanian
AI summary of the source article
Speaking at the Kautilya Economic Conclave, Reserve Bank of India Governor Sanjay Malhotra drew a clear distinction between distributed ledger technology and private cryptocurrencies. He noted the RBI supports DLT, tokenization, and CBDCs like the digital rupee, utilizing them internally and via public-private partnerships. However, private cryptocurrencies pose risks to monetary policy, capital flows, and monetary sovereignty, especially in emerging markets. Malhotra emphasized that crypto does not address pressing domestic payment issues in India, though CBDCs could improve cross-border payments. Crypto remains legal but strictly regulated under anti-money-laundering laws, with the Financial Intelligence Unit actively issuing compliance notices to offshore exchanges.
Why it matters
The stance reinforces India's approach of separating underlying blockchain innovation and tokenization from privately issued cryptocurrencies. This provides regulatory clarity for institutions adopting DLT while signaling sustained scrutiny and compliance pressure on digital asset service providers.
Key facts
- RBI Governor Sanjay Malhotra affirmed support for DLT, asset tokenization, and CBDCs while remaining cautious on private cryptocurrencies.
- Malhotra cited risks to monetary sovereignty, monetary policy, capital flow management, and the principle of the singleness of money.
- On September 9, India's Financial Intelligence Unit issued non-compliance notices to 15 virtual digital asset service providers, including Weex, Blofin, and WOO X.