Updated: 3 October 2026
India’s central bank is drawing a clear distinction between private cryptocurrencies and the financial technologies that can support regulated payments and settlement.
Why the RBI is cautious on crypto
RBI Governor Sanjay Malhotra said on October 3 that India remains cautious about cryptocurrencies because of potential implications for monetary policy, monetary sovereignty and capital flows. At the same time, he said the underlying technologies, including distributed ledger technology and tokenisation, can have useful applications.
DLT and tokenisation
The distinction is important. Distributed ledger technology is a method for recording and verifying transactions across a network. Tokenisation can represent financial assets or claims digitally. Neither technology requires the use of an unregulated cryptocurrency.
Cross-border payments
Malhotra also pointed to cross-border transactions as an area where innovation can address practical gaps. Domestic digital payments in India are already highly developed, but international settlement can involve multiple intermediaries, currencies and time zones. Central bank digital currency infrastructure is one possible area for experimentation in regulated environments.
CBDC angle
For consumers, the message is that digital finance is likely to keep evolving even if the regulatory approach to private crypto remains cautious. Payment systems, tokenised assets and regulated digital money can develop without making cryptocurrency the centre of the financial system.
What it means for users
The risk side remains relevant. Cross-border digital assets can affect capital flows, and new technology can create operational and cybersecurity dependencies. Regulation therefore has to consider not only the technology but also who controls the asset, how transactions are monitored and what happens when something goes wrong.
Key takeaway
The RBI’s position therefore combines caution with technological openness: understand the risks to money and financial stability while continuing to examine technologies that could improve the efficiency of regulated finance.
Sources
Editorial note: This article summarizes publicly reported information available on 3 October 2026 and adds explanatory context. It is not investment, tax or financial advice.