Indian Central Bank Supports Cryptocurrency Ban, Tax Authorities Warn of Tax Evasion Risks

The Reserve Bank of India (RBI) has reiterated its inclination towards banning cryptocurrencies, while tax authorities have warned that transactions conducted through offshore exchanges are difficult to trace. Although the government has yet to implement a ban or regulation on cryptocurrencies, major government agencies are leaning towards stricter restrictions on virtual digital assets. Since the 2018 court ruling that deemed the RBI's ban on cryptocurrencies invalid, the status of cryptocurrencies in India has remained in a gray area. Legislation drafted in 2021 to prohibit private cryptocurrencies has not been submitted for parliamentary review, and related discussion documents have been postponed multiple times. The government has delayed the implementation of a formal virtual asset policy, stating that any plans should balance innovation with risk management while protecting monetary sovereignty, financial stability, and preventing consumer losses.

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