Virtual digital assets like cryptocurrency a threat to economy: RBI tells parliamentary panel
The central bank told the committee that VDAs should not be legalised in India at this stage, citing the risks they pose to the country's financial system.
- Jul 3, 2026,
- Updated Jul 3, 2026 9:48 AM IST
The Reserve Bank of India (RBI) has reiterated its opposition to legalising virtual digital assets (VDAs), including cryptocurrencies, telling a parliamentary panel that such assets pose a threat to an emerging economy like India.
The RBI made the submission before the Parliamentary Standing Committee on Finance, chaired by BJP MP Bhartruhari Mahtab, during a meeting on Thursday to discuss "A Study on Virtual Digital Assets (VDAs) and Way Forward".
According to sources aware of the deliberations, the central bank told the committee that VDAs should not be legalised in India at this stage, citing the risks they pose to the country's financial system. The RBI also argued that digital assets could be used for illegal activities, including terror funding and narcotics smuggling.
The central bank further highlighted the regulatory challenges posed by cryptocurrencies, saying it is extremely difficult to monitor offshore entities involved in crypto trading.
The RBI also pointed to the differing global approaches towards virtual digital assets. It told the panel that countries such as China and Qatar have banned such financial activities, while European jurisdictions have permitted VDAs only under a stringent regulatory framework.
Speaking to reporters after the meeting, committee chairman Bhartruhari Mahtab said the RBI remains opposed to legalising VDAs in India. He also said the committee has been examining aspects of virtual digital assets under the income tax law.
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The panel also held discussions with representatives of the Institute of Chartered Accountants of India (ICAI), which backed the introduction of a comprehensive legal framework for VDAs.
The ICAI told the committee it could support the process by developing a principle-based approach and issuing guidance to improve clarity for stakeholders while strengthening financial reporting and compliance frameworks related to virtual digital assets.
The accounting body also proposed undertaking comprehensive research on different forms of VDAs and analysing their economic characteristics. Based on this work, it said it could develop detailed guidance on the recognition, measurement, presentation and disclosure of virtual digital assets in financial statements, as well as on their accounting and auditing.
The Reserve Bank of India (RBI) has reiterated its opposition to legalising virtual digital assets (VDAs), including cryptocurrencies, telling a parliamentary panel that such assets pose a threat to an emerging economy like India.
The RBI made the submission before the Parliamentary Standing Committee on Finance, chaired by BJP MP Bhartruhari Mahtab, during a meeting on Thursday to discuss "A Study on Virtual Digital Assets (VDAs) and Way Forward".
According to sources aware of the deliberations, the central bank told the committee that VDAs should not be legalised in India at this stage, citing the risks they pose to the country's financial system. The RBI also argued that digital assets could be used for illegal activities, including terror funding and narcotics smuggling.
The central bank further highlighted the regulatory challenges posed by cryptocurrencies, saying it is extremely difficult to monitor offshore entities involved in crypto trading.
The RBI also pointed to the differing global approaches towards virtual digital assets. It told the panel that countries such as China and Qatar have banned such financial activities, while European jurisdictions have permitted VDAs only under a stringent regulatory framework.
Speaking to reporters after the meeting, committee chairman Bhartruhari Mahtab said the RBI remains opposed to legalising VDAs in India. He also said the committee has been examining aspects of virtual digital assets under the income tax law.
DON'T MISS | Crypto is becoming a portfolio asset, not a get-rich-quick bet: Report
The panel also held discussions with representatives of the Institute of Chartered Accountants of India (ICAI), which backed the introduction of a comprehensive legal framework for VDAs.
The ICAI told the committee it could support the process by developing a principle-based approach and issuing guidance to improve clarity for stakeholders while strengthening financial reporting and compliance frameworks related to virtual digital assets.
The accounting body also proposed undertaking comprehensive research on different forms of VDAs and analysing their economic characteristics. Based on this work, it said it could develop detailed guidance on the recognition, measurement, presentation and disclosure of virtual digital assets in financial statements, as well as on their accounting and auditing.