- The RBI urges lawmakers to codify a sweeping ban on Bitcoin and cryptocurrencies, citing their growing use in illicit finance.
The Reserve Bank of India (RBI) has renewed its push to ban Bitcoin (BTC) and cryptocurrencies. The move comes amid the central bank’s failure to impose the sweeping ban in 2020 and India’s high crypto adoption rate.
RBI’s Renewed Push to Ban Bitcoin and Crypto in India
The RBI is reportedly urging lawmakers to lean toward a full prohibition on Bitcoin and crypto after repeatedly failed attempts to do so. Reuters claimed that the central bank reasserted its stance that there should be a blanket ban on them.
Reviving the same tune it had been playing for years, the RBI cited concerns over these digital assets’ tendency to be used by malicious actors in illicit finance. It highlighted that their anonymous and decentralized nature makes them hard to track.
With that, the central bank stated that criminal elements exploit such features in money laundering and terrorism financing. It also reiterated the tax department’s warning about rising tax evasion cases involving crypto.
Additionally, the RBI opposed any attempt to regulate Bitcoin and other cryptocurrencies. The central bank argued that it would only legitimize speculative assets and give retail investors a false sense of security when using them or investing in them.
Previous Efforts to Prohibit Virtual Assets
The RBI notably issued a circular in 2018 prohibiting banks and regulated entities from providing services related to virtual assets, including Bitcoin. The Supreme Court of India eventually overturned the ban in 2020 because the central bank failed to provide empirical evidence to support its argument that crypto has directly and indirectly harmed traditional banks.
Moreover, the court said that Bitcoin and crypto are not illegal in India, and prohibiting them would infringe citizens’ right to carry on lawful trades or businesses. As a result, the RBI shifted its strategy toward heavy tax burdens on all crypto capital gains, with a flat 30% rate.
In essence, the institution treated crypto gains as income rather than traditional capital gains. However, it backfired when traders and investors migrated their capital instead to unregulated or offshore platforms.
India Leads Global Crypto Adoption
India has consistently ranked high in crypto adoption. In 2025, it remained at the top of Chainalysis’ 2025 Global Crypto Adoption Index Top 20.
The country surpassed the United States (US) in value received from crypto activities, and has locked the top 5 rankings with Pakistan and Vietnam.
The three significantly contributed to the Asia-Pacific (APAC) region’s growth in crypto transaction volume, going from $1.4 trillion in 2024 to $2.36 trillion in 2025.
It remains to be seen whether lawmakers will give in to the RBI’s demand to codify the ban on Bitcoin and crypto. Nonetheless, their decision holds the potential to shift the balance of global crypto dynamics, given India’s strong positioning in the digital assets market.
