RBI Renews Crypto Prohibition Push as Tax Gaps Widen

The RBI's stance is partly shaped by India's external vulnerabilities. The country depends heavily on energy imports and runs persistent current account deficits. Recent tensions with Iran pushed oil prices higher, swelling the import bill and driving the rupee to record lows. The central bank fears that widespread crypto adoption could accelerate capital outflows, bypassing traditional banking channels and worsening the external deficit. More on that dynamic is covered in India's RBI pushes crypto bank ban as tax gap widens.

Globally, stablecoin market cap fell to $312 billion in June, the largest monthly drop since the TerraUSD collapse. Tokenized equity volumes surged 145% to a record $3.86 billion over the same period.

For investors holding Indian crypto exposure, the risk of a sudden prohibition remains real. A ban would likely hit local exchanges first, triggering a selloff and a premium on INR-based pairs. Offshore platforms serving Indian users could face ISP blocks or payment-channel restrictions. The government has spoken about balancing innovation with risk management. Internal documents suggest key agencies still oppose accepting digital assets.

The timeline for any legislative action is unclear. The 2021 draft bill never reached parliament. No new vehicle has been presented since. The next budget cycle or the fall session of parliament are natural windows for reintroducing the debate.