RBI Maintains Skepticism on Crypto While Accelerating Tokenization

Malhotra identified the "singleness of money" as a primary concern, arguing that private digital assets risk undermining the principle that different forms of money must maintain parity and interchangeability. The RBI remains focused on preserving financial integrity and settlement finality, viewing private crypto as a disruption to domestic policy rather than a necessary innovation for payments. According to the governor, India’s existing digital payment infrastructure already provides efficient domestic transfers, rendering private alternatives redundant.

Contrasting this skepticism, the central bank is actively integrating distributed ledger technology into state-sanctioned projects. The RBI is currently testing programmable digital rupee settlement systems, alongside tokenized corporate bonds and certificates of deposit. In September, the Securities and Exchange Board of India launched its "Demat 2.0" pilot, which uses ledger infrastructure for securities while settling cash transactions directly through central bank money. These initiatives focus on regulated financial assets rather than speculative digital tokens.

While the government has yet to pass comprehensive legislation governing the entire digital asset market, it continues to enforce strict compliance through existing channels. In September, the Financial Intelligence Unit-India issued notices to 15 offshore crypto platforms, including Weex and WOO X, for failing to meet anti-money-laundering registration requirements. These entities are now required to restrict access for Indian users. Despite this pressure, the government continues to refine tax frameworks for virtual digital assets, maintaining a regulatory environment that permits trading under strict oversight while insulating the traditional banking sector from direct exposure to private cryptocurrencies.