RBI Cracks Down on Crypto, Eyes Ban Amid Growing Concerns Over Financial Stability

The Reserve Bank of India (RBI) has expressed concerns over cryptocurrencies and hinted at a potential ban. The central bank wants banks and financial institutions to be restricted from holding, trading or gaining exposure to crypto assets and privately issued Stablecoins.

This move comes as the Indian government continues to work on a policy framework for virtual digital assets (VDAs). However, regulatory clarity remains elusive, leaving the sector in a grey area. The RBI's stance is part of a broader effort by key Indian agencies to tighten curbs on VDAs.

The Income Tax Department has also highlighted challenges in monitoring transactions conducted through overseas crypto platforms. This raises concerns around tax compliance and possible evasion risks. Despite these challenges, India's crypto market continues to grow, with nearly 39 million traders holding around $2.10 billion worth of digital assets at the end of May.