In a recent recommendation to a parliamentary panel, RBI officials urged lawmakers to keep banks and regulated financial institutions completely insulated from crypto assets and privately issued stablecoins. The central bank’s preferred framework: a “calibrated containment strategy leaning towards prohibition” that would prevent any bank exposure through payments, settlements, or balance sheets.
The Supreme Court struck down the RBI’s 2018 circular that barred banks from servicing crypto firms back in March 2020, and there’s been no legislative ban since. The RBI is playing a differentiation game. Private crypto and stablecoins sit on one side of the line, deemed too risky for the formal banking system. On the other side: tokenized deposits issued by banks and the government’s own Central Bank Digital Currency, the e-rupee, which the RBI views as the acceptable face of digital finance.
Deputy Governor T Rabi Sankar argued in December 2025 that stablecoins don’t offer unique advantages compared to fiat currencies or CBDCs, and could pose “substantial risks to monetary stability and systemic resilience.” India is currently running pilots for both wholesale and retail versions of the e-rupee alongside commercial banks experimenting with tokenized deposits.
