India’s Central Bank has once again taken a firm position against private cryptocurrencies, saying they cannot be treated as real money or credible financial assets. The Reserve Bank of India (RBI) has stressed that popular digital tokens are simply lines of computer code and do not hold any intrinsic value in the traditional economic sense.
RBI Deputy Governor, T Rabi Sankar has said that private cryptocurrencies fail to meet the basic standards required to qualify as currency. According to him, these tokens are not backed by any underlying asset, do not have sovereign support and carry no enforceable promise of payment. Their prices, he noted, are driven largely by speculation. This makes them unreliable as a store of value, a unit of account, or a medium of exchange, which are the core functions of money.
The central bank’s remarks are consistent with its long-standing caution on digital tokens. Over the years, the RBI has warned about risks linked to volatility, fraud, consumer harm and threats to financial stability. Regulators have also raised concerns about the possible misuse of crypto assets for money laundering and other illegal activities. In India, cryptocurrencies are not recognised as legal tender and do not fall under any dedicated regulatory framework. While buying and selling them is not banned, such activity is done entirely at the user’s own risk.
The government has chosen a strict tax approach to curb crypto activity, imposing high taxes on gains without declaring the sector illegal. Commerce Minister Piyush Goyal has echoed the RBI’s view, saying private cryptocurrencies are not backed by real assets or sovereign guarantees. At the same time, authorities are pushing a central bank digital currency in the form of a digital rupee. The RBI began pilot trials of its CBDC about 3 years ago. This cautious stance contrasts with some global moves, including in the United States, where President Donald Trump signed an executive order to treat Bitcoin as part of a reserve framework, even as crypto related scams continue to rise worldwide.
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