RBI Governor Declares Crypto a Threat as 15 Platforms Receive Notices

India’s central bank isn’t budging on crypto. On October 3, RBI Governor Sanjay Malhotra stood at the Kautilya Economic Conclave in New Delhi and made the Reserve Bank of India’s position pretty clear — private digital currencies are a problem, and the RBI isn’t warming up to them anytime soon.

Malhotra’s core worry is something he calls “singleness of money.” It’s basically the idea that different forms of money circulating in the same economy need to hold equal value and stay interchangeable. If crypto assets get valued or backed in ways that diverge from sovereign money, that principle breaks down fast. And when it breaks down, monetary policy gets harder to run and capital flows become harder to manage. That’s the RBI’s fear in plain terms — not just philosophical discomfort with Bitcoin, but a structural concern about what happens to India’s financial plumbing if private digital currencies gain real traction.

Not a ban. Not yet.

Malhotra also pushed back on the idea that India even needs private cryptocurrencies for domestic payments. India’s existing payment infrastructure — UPI, IMPS, the whole stack — already works well. His argument: why add private crypto into that mix when CBDCs can handle cross-border payments instead? It’s a pointed question, and it kind of frames the RBI’s entire posture. They’re not anti-innovation. They’re anti-private-crypto specifically.

Tokenization Is Where the RBI Actually Wants to Go

Strip away the crypto skepticism and there’s a real digital push happening inside the RBI. At the Global Fintech Festival in September, Malhotra laid out a set of active initiatives — programmable CBDCs, tokenized securities, tokenized corporate bonds settled through the wholesale digital rupee. These aren’t distant pilots. The RBI is moving on them.

SEBI launched its Demat 2.0 pilot for tokenized corporate bonds on September 10. The bonds use distributed ledger technology for security records and settle using central bank money — not private stablecoins, not crypto rails. That’s the design choice that matters here. SEBI and the RBI are building something that captures the efficiency of blockchain-style settlement while keeping sovereign currency at the center of every transaction.

The Unified Markets Interface is part of this too, aimed at strengthening digital settlement infrastructure. Tokenized certificates of deposit are in the mix alongside the corporate bonds. And the RBI’s digital rupee program keeps expanding — a CBDC-based direct benefit transfer program for specific regions was introduced in August, using the digital rupee to distribute government benefits directly.

India’s also been in talks with Russia on CBDC-based trade settlement infrastructure. No finalized deal from the source, but discussions are ongoing. The direction is clear: the RBI wants sovereign digital currencies woven into international trade, not private crypto assets.

Read also: SECs Innovation Exemption Fuels Tokenized Stocks to $3.5 Billion Market Cap

15 Offshore Platforms Got Notices — Compliance Is Non-Negotiable

India’s regulatory posture toward crypto businesses has teeth, even if there’s no outright ban. Since March 2023, virtual digital asset service providers have had to register with the Financial Intelligence Unit-India and comply with the Prevention of Money Laundering Act. That’s not optional, and it applies to offshore platforms too — even ones without a physical presence in India.

The FIU-India sent notices to 15 offshore crypto platforms for operating without the required registration. That enforcement action is a signal. The government isn’t just writing rules and walking away. It’s watching who registers and who doesn’t, and it’s willing to act.

Trading continues under existing frameworks. There’s no comprehensive ban in place. But banks are being kept at arm’s length from private crypto exposure — that’s a deliberate policy choice, and it’s held firm. Internal documents from July pointed toward a policy inclination to prohibit privately issued stablecoins specifically, with the goal of shielding regulated financial institutions from the risks those assets carry.

UPI, meanwhile, has gone international. As of July, it’s operational in Singapore, France, and the UAE. That expansion fits the RBI’s broader strategy — build out India’s sovereign payment infrastructure globally, and the case for private crypto in cross-border payments gets weaker by default.

The RBI’s approach is probably best described as a two-track system. Track one: clamp down on private crypto assets, keep banks insulated, enforce registration requirements hard. Track two: push aggressively into tokenization, CBDCs, and digital settlement infrastructure using sovereign money as the foundation.

See also: Community Banks Challenge OCC Over Crypto Trust Charters Skipping FDIC Rules

What’s murky is how long India can hold that line as crypto adoption keeps growing across Asia. The regulatory framework for virtual digital assets is still evolving — the government is still working through more comprehensive legislation, and no timeline on that is clear from the source.

For now, the FIU-India keeps sending notices, SEBI’s Demat 2.0 pilot runs on distributed ledger rails, and Malhotra keeps the RBI’s position exactly where it was — cautious on crypto, committed to tokenization, and not particularly interested in changing either stance.

The 15 offshore platforms that got notices have a compliance problem on their hands.