India tightens its stance: Central Bank again calls for a complete ban on cryptocurrencies
The Reserve Bank of India (RBI) has once again issued a stern warning to the crypto industry. According to the regulator's internal documents, it has proposed a direct ban for banks, financial organizations, and other supervised entities on conducting any operations with crypto assets and private stablecoins. This is not just rhetoric—it is a concrete step toward isolating digital currencies from the country's traditional financial system.
In parallel, India's tax authority has published its own analysis, pointing to systemic risks of tax evasion. The main channels of concern are foreign crypto exchanges, uncontrolled private wallets, and P2P transactions. According to fiscal authorities, there are nearly 39 million crypto traders in the country, with total assets estimated at $2.1 billion.
Particularly telling is the discrepancy between actual activity and tax reporting. In the financial year ending March 2023, 645,000 individuals conducted transactions with digital assets. However, less than a quarter of them chose to reflect these operations in their tax returns. This creates a massive gap between the actual market volume and its officially recognized portion, which, in the authorities' view, requires immediate intervention.
Expert commentary: In my opinion, India is demonstrating a classic example of conflict between innovation and financial control. The RBI's attempts to completely isolate cryptocurrencies from the banking system could drive the market even deeper into the shadows, rather than making it disappear. 39 million users are no longer a marginal group but a significant part of the economically active population. Instead of a total ban, which would only exacerbate problems with taxation and consumer protection, India should consider a regulatory model similar to those being implemented in the UAE or Hong Kong, where control is combined with legalization.