TechFlow reports, July 3, the Reserve Bank of India stated in a submission to a parliamentary committee that it supports a restrictive regulatory path leaning towards prohibition, recommending that banks and other regulated financial institutions shall not hold, trade, or engage with crypto assets and privately issued stablecoins, to reduce potential contagion and financial stability risks.
The central bank also pointed out that incorporating crypto assets into the conventional regulatory framework could be interpreted by the market as an endorsement of speculative products lacking actual economic benefits. It also questioned the claim that "India is the world's largest crypto adoption nation," and warned that large-scale use of stablecoins could undermine monetary sovereignty, affect monetary policy transmission, and exacerbate fragmentation of the payment system.
