India’s RBI revives push to keep banks away from crypto and stablecoins, report says

The Reserve Bank of India is reportedly pressing lawmakers to keep digital assets outside the banking system, including a ban on their use in payments and settlements and tighter limits on bank exposure. For PSPs and acquiring teams, the important part is not the headline ban language; it is the RBI’s effort to draw a hard line around regulated rails while leaving tokenization of traditional assets alone.

1. According to The Economic Times, RBI Deputy Governor Rohit Jain and Executive Director P. Vasudevan presented the central bank’s position to the Parliamentary Standing Committee on Finance on Thursday. In a background note to the panel, the RBI reportedly said prohibition remained a recognized policy option.
2. The central bank’s reported recommendation is straightforward: prevent crypto from being used in payments and settlements, and restrict banking-sector exposure. That is the sort of rule that does not formally ban ownership, but still makes it difficult for exchanges and other crypto businesses to keep access to local banking rails.
3. The RBI reportedly argued that treating crypto under traditional regulation could legitimize speculative assets and create a false sense of safety for users. At the same time, it urged policymakers to separate crypto from tokenized government securities, corporate bonds and other regulated financial instruments so that restrictions do not spill over into tokenization.
4. India ranked first in Chainalysis’ 2025 Global Crypto Adoption Index, although the RBI reportedly challenged the methodology behind private-sector adoption rankings. That matters because adoption data can be used to argue for either tighter controls or a more permissive framework, depending on who is reading the chart.
5. This is not a new posture from the RBI. In 2018, the central bank directed regulated financial institutions to stop dealing in crypto or providing services to individuals and businesses involved in it, effectively cutting crypto exchanges off from India’s banking system without banning individuals from owning or trading crypto. India’s Supreme Court overturned that circular in March 2020, and in May 2021 the RBI clarified that banks could not rely on the invalidated circular while still applying know-your-customer, anti-money laundering and foreign-exchange compliance requirements.

For high-risk payment providers, the practical takeaway is that India’s policy debate is still about access: who gets to touch bank rails, under what conditions, and whether crypto is treated as a payment use case or kept in a separate regulatory box.