RBI Stays Cautious on Crypto But Doubles Down on Blockchain Tech

Speaking at the Kautilya Economic Conclave in New Delhi earlier this month, RBI Governor Sanjay Malhotra said something that's easy to miss if you only read the headline: the central bank isn't against the technology behind crypto, just the currencies themselves.

What Malhotra actually said

The quote making the rounds is blunt. "Our approach has been to promote the underlying technologies," Malhotra said, "but as far as crypto is concerned, we have taken a cautious stance." That's a more nuanced position than "RBI hates crypto," which is how it usually gets summarized. The RBI has spent the last year running tokenisation pilots with SEBI on corporate bonds, and it wants to push that further into equities and mutual fund units. What it won't do is treat Bitcoin, Ether, or any privately issued token as money.

His reasoning comes down to what economists call the "singleness of money" — the idea that a rupee in your pocket, a rupee in your bank account, and a rupee sitting with a payments app should all be worth exactly the same thing, with no question about it. Multiple competing private currencies floating around, in RBI's view, threatens that uniformity and with it, the central bank's ability to run monetary policy at all. It's a concern about control over the money supply, not a judgment on whether blockchain is useful technology.

"Our approach has been to promote the underlying technologies, but as far as crypto is concerned, we have taken a cautious stance." — RBI Governor Sanjay Malhotra, Kautilya Economic Conclave

Digital rupee, not digital dollar

Instead of crypto, RBI's bet is the e-rupee — its own central bank digital currency, or CBDC (a digital version of a country's official currency, issued and backed directly by the central bank rather than a private company or blockchain network). According to the RBI's FY26 annual report, retail e-rupee in circulation actually fell over the past year, from roughly ₹1,016 crore to about ₹772 crore, which tells you adoption is still a work in progress. RBI's response isn't to scrap the project but to widen it: expanding pilots into direct benefit transfer schemes, building out a CBDC and asset-tokenisation sandbox for startups to test products in, and — notably — exploring cross-border CBDC transactions with partners like Singapore and the UAE.

That cross-border piece is where Malhotra sees the real unsolved problem. International payments are slow and expensive today, and he's framed CBDCs, not stablecoins or crypto, as RBI's preferred fix.

Why this matters if you're in India

For Indian crypto users and the exchanges that serve them, none of this is new in spirit, but it confirms where things are headed for the near future. There's still no dedicated crypto law in the country — holdings are taxed at a flat 30% on gains plus a 1% TDS (tax deducted at source, withheld upfront on every transaction) on transfers, but there's no regulatory framework resembling what the US or EU have built. Parliament's finance committee has heard similar caution from RBI officials about stablecoins specifically, with deputy governor Rohit Jain warning that even rupee-pegged ones pose risks to monetary sovereignty. We covered the state of that parliamentary process in detail in our earlier piece on India's crypto rules stuck in limbo, and Malhotra's remarks read like a continuation of that same holding pattern rather than a shift.

For developers and startups, the more interesting opening might be the tokenisation sandbox itself. If RBI is serious about letting fintechs experiment with tokenised bonds, equities, and fund units under its own regulatory roof, that's a sanctioned space to build blockchain-adjacent products without touching the crypto trading ban RBI still effectively enforces through banking access restrictions. It's a narrower lane, but it's one the regulator is actively widening.

• RBI backs the technology (tokenisation, blockchain infrastructure) while staying cautious on crypto assets themselves
• Retail e-rupee circulation dropped year-on-year, prompting RBI to expand rather than abandon the pilot
• Cross-border CBDC pilots with Singapore and the UAE are in the works
• India still has no standalone crypto law — just tax rules and informal banking restrictions

The bigger picture

What's striking is how consistent this stance has been across RBI governors. The institution keeps finding new language for the same position: crypto assets stay outside the financial system, but the engineering underneath them is fair game. For an Indian crypto investor waiting for clarity, that's not an answer — it's a signal that clarity, in the form of actual legislation, is still someone else's job to deliver, not the RBI's.