Cryptocurrency difficult to regulate, RBI tells Parliamentary panel

RBI officials told a parliamentary committee on virtual digital assets that cryptocurrency is difficult to regulate, according to reports published on Thursday. The briefing adds fresh weight to India’s long-running debate over whether private digital assets should be contained, tightly restricted or banned.

The central bank’s warning centered on the risks crypto can pose in transnational crime, including drug trafficking and terrorism financing, the reports said. One report also said RBI officials argued that banks and other regulated financial institutions should be kept insulated from crypto assets and privately issued stablecoins.

What RBI told lawmakers

The Times of India reported that the RBI told the parliamentary panel cryptocurrency is difficult to regulate. The Economic Times separately reported that officials backed a containment strategy and said a complete ban remains an option under consideration.

That approach would focus on limiting exposure to the banking system and other regulated entities rather than treating private crypto as a mainstream regulated asset class.

Policy stakes

The briefing matters because it touches several unresolved policy questions in India. A tougher stance could shape whether the government moves toward legalization with restrictions, tighter containment or prohibition.

The issue also has wider financial-stability implications if banks, payment firms or other regulated institutions are allowed to deepen links with crypto markets. Law-enforcement concerns, especially around money laundering and terrorism financing, remain central to the RBI’s caution.

India has not legalized cryptocurrency as a mainstream regulated asset class, and the RBI has long signaled skepticism toward private crypto and stablecoins. The parliamentary committee’s next move will help show whether the discussion stays at the level of caution or turns into a formal policy recommendation.

What to watch next

The next official checkpoint is likely to be the committee’s report or any follow-up from the finance ministry. Market participants will also be watching for responses from crypto exchanges, banks and industry groups as the debate continues.