RBI Asks Lawmakers to Limit Bank Exposure to Crypto

India's central bank this week urged lawmakers to limit bank exposure to digital assets and stablecoins, reviving a push to separate crypto from the banking system. RBI Deputy Governor Rohit Jain and Executive Director P. Vasudevan briefed the Parliamentary Standing Committee on Finance on Thursday, the Economic Times reported, citing people familiar with the discussions.

In a background note, the RBI said prohibition remains a recognized policy option and backed limits on crypto use in payments and settlements. The proposal echoes the 2018 circular that barred regulated financial institutions from serving crypto exchanges. The Supreme Court overturned that order in March 2020, ruling the RBI had not shown harm to banks.

The RBI argued that normal regulation could give speculative assets a false sense of safety. It asked lawmakers to distinguish crypto from tokenized instruments like government securities and corporate bonds. The central bank also challenged the methodology behind private adoption rankings, even as India ranked first in Chainalysis' 2025 Global Crypto Adoption Index.

The committee is expected to produce a report on digital asset policy. The RBI's position will influence the final framework.