RBI governor hints at shift in cryptocurrency stance

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Saturday hinted that the government’s hardline stance on cryptocurrency could soften. Malhotra said a discussion paper on cryptocurrency is planned, but refrained from sharing an opinion until the paper is published.

Malhotra’s remarks came days after the government signalled that it would revisit its cryptocurrency matrix in light of recent developments in the global scenario.

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Speaking at a town hall organised by CNBC-TV18 on Monday, February 3, Department of Economic Affairs (DEA) Secretary Ajay Seth said, “As we are aware… we have done a discussion paper on cryptocurrency, with senior level participation from the Reserve Bank of India.” However, before its release, a number of global jurisdictions changed their position on crypto assets, particularly in terms of their use in cross-border payments and stablecoin adoption, he said.

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“The committee had finalised the discussion paper, but thereafter, we find that, when it was about to be issued, several jurisdictions, and you named one… but more than one jurisdictions… have changed their position on crypto assets in terms of their scope, where they see the utility, including for settlement, multilateral settlement, of payments, cross border payments,” Ajay Seth said.

Is the Indian govt’s stance on cryptocurrency shifting?

This marks a departure from the government’s—and the central bank’s—hardline stance on cryptocurrency.

Last October, the then-RBI Governor Shaktikanta Das warned that cryptocurrencies pose significant risks to financial and monetary stability, potentially undermining central banks’ control over the money supply.

Das said cryptocurrencies could destabilise the banking system and hinder inflation control during crises, calling for international cooperation to address these cross-border risks. Das also questioned the legitimacy of privately issued cryptocurrencies, arguing that currency issuance is a sovereign function, and warned against allowing a parallel private currency system that could destabilise the financial system.

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