RBI remains cautious on crypto, backs underlying technology: Governor Malhotra

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RBI Malhotra said India supports innovation in the technologies underlying crypto assets, including distributed ledger and tokenisation, but remains cautious about cryptocurrencies, owing to concerns over monetary sovereignty, monetary policy and capital flows. File | Photo Credit: Reuters

India has maintained a cautious approach towards cryptocurrencies while promoting the underlying technologies, such as distributed ledger technology and tokenisation, Reserve Bank of India (RBI) Governor Sanjay Malhotra said on Saturday (October 3, 2026).

Mr. Malhotra said India supports innovation in the technologies underlying crypto assets, including distributed ledger and tokenisation, but remains cautious about cryptocurrencies, owing to concerns over monetary sovereignty, monetary policy and capital flows.

"So, our approach has been to promote the underlying technologies, and we are using some of these in the central bank and outside, in PPP [public-private partnership] mode. But insofar as crypto is concerned, it has been a cautious approach," he said at the Kautilya Economic Conclave.

Expressing concerns about cryptocurrencies, the RBI Governor said the issue was related to the "singleness of money" and their potential implications for monetary policy, particularly in emerging market economies, where capital flow restrictions are in place.

"The problem that you are trying to address is primarily not so much of domestic payments, because domestic payments within our country, and in many countries now, are quite fast, cheap and convenient," he said.

The more significant challenge is cross-border payments, for which other solutions, including central bank digital currencies (CBDCs), can be explored, Mr. Malhotra said.

On rising public debt and hardening bond yields globally, he said yield movement is essentially a function of demand and supply, with government and private-sector spending rising, including on account of artificial intelligence (AI). "Money is scarce, spending has increased, both by the government as well as private enterprises, led by AI, and so that's what is leading to the hardening of the bond yields and debts," he said.

Mr. Malhotra said the RBI's monetary policy primarily focuses on domestic growth-inflation dynamics, but that global interest rates also have implications for India, including through their impact on real interest rates in the country. "That is something that we need to take care of," he said.

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