RBI Slams Crypto Use for Payments, Seeks Banks' Distance Amid Rising Financial Crimes

The Reserve Bank of India (RBI) wants banks to stay away from cryptocurrencies and private stablecoins. The RBI's stance is based on the rise in financial crimes involving digital assets, with 49 cryptocurrency exchanges registered with the Financial Intelligence Unit (FIU) in the 2024-25 financial year.

The central bank warned that treating crypto like normal financial products could make people think it is safe and officially approved, even though it remains a risky investment. The RBI Governor emphasized that cryptocurrencies should not be used for payments and that banks should stay away from crypto-related businesses.

The RBI does not oppose blockchain technology itself, but rather wants policymakers to clearly separate cryptocurrencies from tokenized financial assets such as government securities and corporate bonds. This would allow tokenization to develop without encouraging wider crypto adoption.