The regulatory war in India against digital assets is entering a new phase. The Reserve Bank of India (RBI) has once again put forward a radical initiative, proposing a direct ban on transactions with cryptocurrencies and private stablecoins for all banks, financial organizations, and other supervised entities.
This position, outlined in the regulator's internal documents, demonstrates the country's monetary authorities' consistent rejection of the crypto industry. The RBI insists that any interaction by financial institutions with digital assets carries systemic risks and undermines financial stability. Particular attention is paid to private stablecoins, which the regulator considers "opaque" and potentially dangerous instruments.
Concurrently, India's tax authority has issued its own warning, pointing to serious risks of tax evasion. According to fiscal authorities, the main channels for concealing income are foreign exchanges, non-custodial wallets, and P2P transactions. The agency's estimates are striking: there are about 39 million crypto traders in the country, with total assets valued at $2.1 billion. However, only 645,000 people conducted transactions in the financial year ending March 2023, and less than a quarter of them reported these operations in their tax returns.
Cryptalist Analysis: The latest RBI démarche is not just a bureaucratic initiative but a clear signal to the market. Indian authorities appear to be preparing for a total purge of the sector, ignoring the global trend toward regulation. The paradox of the situation is that, despite such harsh rhetoric and the presence of millions of active users, the Indian market remains one of the largest in the world. This creates immense tension between the state's desire to control capital and the population's real demand for financial freedom. If the ban is implemented, we will see either a massive outflow of users into the gray zone or a sharp rise in the popularity of decentralized solutions, making government control virtually impossible.