The Reserve Bank of India reiterates its opposition to the legalization of cryptocurrency to the parliamentary panel, favoring a containment-based regulatory approach.

Foresight News reports, according to Economic Times, the Reserve Bank of India (RBI) reiterated its opposition to the legalization of Virtual Digital Assets (VDA, including cryptocurrencies) in a statement to the Indian Parliament's Standing Committee on Finance on Thursday, arguing that such assets pose a threat to emerging economies. This is the first time RBI has directly presented its views on cryptocurrency to the committee, which was meeting on “Research on Virtual Digital Assets and Future Pathways”.

RBI officials stated that Virtual Digital Assets should not be granted legal status at this stage, citing concerns that these assets could be used for terrorist financing, drug trafficking, and other illegal activities, while offshore-related entities are difficult to regulate. According to another report, RBI prefers to adopt a restrictive approach to ensure banks and regulated financial institutions are protected from risks associated with this asset class. RBI also criticized stablecoins pegged to fiat currencies (such as the US dollar), arguing that they undermine national monetary sovereignty, and advocated for users to transact virtual assets only through RBI's own Central Bank Digital Currency (CBDC).

After the meeting, Committee Chairman Bhartruhari Mahtab told the media that RBI opposes the legalization of Virtual Digital Assets in India. He also mentioned that, compared to other digital assets, RBI's own digital currency (the electronic rupee) “is not a flourishing asset”, with a user base of about 10 million, representing only 0.42% of India's population, and struggles to gain traction under the dominance of the Unified Payments Interface (UPI, which processes over 300 million transactions daily). The meeting also heard the views of the Institute of Chartered Accountants of India (ICAI), which supports establishing a comprehensive legal framework for Virtual Digital Assets. RBI further questioned the longstanding claim that India is one of the world's largest adopters of cryptocurrency, stating that private blockchain analytics firms employ flawed statistical methods that may overestimate adoption rates in countries with large populations.