India central bank seeks to bar financial institutions from exposure to crypto assets: Reuters
India's central bank called for banks to be barred from crypto exposure as it reiterated support for tighter restrictions on digital assets.
India's Reserve Bank (RBI) has called for financial institutions to be barred from holding any exposure to cryptocurrency assets, according to a Reuters report. The central bank reiterated its position in favor of stricter restrictions on digital assets, signaling a continued hardline stance toward crypto integration within the country's regulated financial sector.
The RBI has historically opposed cryptocurrencies, viewing them as a threat to financial stability and monetary policy sovereignty. India has taken a cautious and often restrictive approach to crypto regulation over the years, including a previous banking ban that was struck down by the Supreme Court in 2020. Despite a growing domestic crypto user base, the government and central bank have maintained persistent skepticism toward decentralized digital assets.
The move, if implemented, could significantly limit the ability of Indian banks and financial institutions to offer crypto-related services or hold digital assets on their balance sheets. Such restrictions would place India among the more restrictive major economies in terms of institutional crypto access, potentially curbing the development of a regulated crypto ecosystem within the country and pushing activity toward less regulated channels.
Market observers will be watching whether the Indian government moves to formalize the RBI's recommendation into legislation, and how existing crypto exchanges and financial service providers operating in India respond to the evolving regulatory landscape.
Source: The Block
