**India’s Central Bank Takes Steps to Keep Crypto at Bay**
The Reserve Bank of India (RBI) is reinforcing its stance on cryptocurrency, urging lawmakers to ensure banks remain insulated from crypto and private stablecoins. According to a report by *The Economic Times*, RBI Deputy Governor Rohit Jain and Executive Director P. Vasudevan presented this position to the Parliamentary Standing Committee on Finance.
In a background note submitted to the panel, the RBI indicated that a prohibition remains a recognized policy option. They recommended preventing the use of cryptocurrency in payments and settlements while restricting banking-sector exposure. The central bank cautioned that applying traditional regulation to crypto could legitimize speculative assets and create a false sense of safety among users. At the same time, the RBI urged policymakers to distinguish crypto from tokenized government securities, corporate bonds, and other regulated financial instruments so that restrictions would not hinder tokenization.
This move aligns with global trends where regulators are carefully scrutinizing the intersection of traditional finance and digital assets. While the RBI is open to tokenization of regulated financial instruments, it aims to keep banks and the broader financial system protected from the volatility and risks associated with cryptocurrencies.
*Source: The Economic Times, “India’s central bank revives push to isolate banks from crypto: Report”*
