India's central bank has advocated for a regulatory approach "tilted toward a ban" on cryptocurrency, while simultaneously calling for restrictions on bank involvement with crypto assets and private stablecoins. The move reflects mounting pressure from Indian authorities to curb digital asset adoption amid compliance challenges.
The country's tax department has identified significant revenue leakage in the crypto sector, revealing that fewer than 25% of 645,000 users who conducted cryptocurrency transactions reported them in tax filings. Tax officials attributed the compliance gap to the difficulty of monitoring trades executed on foreign exchanges and through private wallets, complicating both oversight and revenue collection.
The coordinated stance from India's financial regulators signals a hardening position on cryptocurrency regulation, moving beyond taxation toward potential outright prohibition. The central bank's endorsement of a ban-leaning framework could influence legislative discussions and reshape the operating environment for crypto businesses serving the Indian market, one of Asia's largest by user base.