India’s central bank has doubled down on a split approach to digital assets: keep cryptocurrencies at arm’s length, but pour support into the technology underneath them. Reserve Bank of India Governor Sanjay Malhotra told the Kautilya Economic Conclave in New Delhi on October 3 that India remains “cautious” on crypto while the RBI actively tests tokenized bonds, tokenized certificates of deposit, and programmable digital rupee settlement systems.
By Keisha Williams | October 4, 2026
The Hook: One Speech, Two Very Different Messages
For regular investors, the takeaway is simple. India, one of the world’s largest crypto markets by user count, is not banning the technology — it is trying to rebuild it on its own terms. “So, our approach has been to promote the underlying technologies,” Malhotra said, referring to distributed ledger technology, the shared-record system behind blockchain networks, and tokenization, the process of representing traditional assets like bonds as digital tokens that can settle instantly.
The governor also revealed that the RBI is already using some of this technology internally and through public-private partnerships. In plain terms: the plumbing India builds for its own financial system will increasingly look like blockchain, even if private cryptocurrencies stay on the outside looking in.
On-Chain Evidence: What the RBI Is Actually Building
The central bank’s experiments are concrete rather than theoretical. According to the governor’s remarks, the projects now in testing include:
- Tokenized corporate bonds — bonds turned into digital tokens so ownership transfers can settle in seconds instead of days, like sending a photo instead of mailing a printed copy
- Tokenized certificates of deposit — short-term bank instruments issued as tokens, making them easier to trade and track
- Programmable digital rupee settlement — payments using India’s central bank digital currency that can carry conditions, such as releasing funds only when a delivery is confirmed
The contrast with private crypto is deliberate. In September, India’s Financial Intelligence Unit issued notices to 15 crypto platforms for violating anti-money-laundering compliance requirements, a reminder that enforcement remains active even without a comprehensive crypto law on the books.
The Core Conflict: The “Singleness of Money”
At the heart of the RBI’s caution is a principle Malhotra called the “singleness of money” — the idea that every form of money denominated in the same currency should hold the same value and remain interchangeable. A rupee in a bank account, a rupee in cash, and a rupee in a digital wallet should all be worth exactly one rupee.
Private crypto assets and privately issued stablecoins threaten that principle, the governor argued, because their value, backing, or settlement structure can diverge from sovereign money. He tied the concern directly to monetary policy and capital-flow management, particularly in emerging economies like India that maintain controls on cross-border capital movements. In other words: if money can leak out of the country through crypto rails that the central bank cannot see or steer, India’s economic levers lose their grip.
Market Implications: Why This Matters Beyond India
Malhotra also pushed back on the argument that private cryptocurrencies are needed to improve domestic payments. India already runs fast and low-cost domestic payment infrastructure, he noted, leaving cross-border payments as the genuinely difficult problem — one the RBI believes central bank digital currencies and links between regulated payment systems could solve without private tokens.
For investors, the signal is twofold. First, regulatory clarity in India remains distant: the country has still not enacted a comprehensive crypto law, while existing tax and anti-money-laundering rules stay in force. Second, the institutional momentum behind tokenization is unmistakable. The same technology that powers public blockchains is being absorbed into the regulated financial mainstream — central banks, bond markets, and settlement systems — even as the tokens retail investors hold stay in a regulatory gray zone. Bitcoin, for context, trades near 85,116 USD according to CoinGecko data, and the broader market continues to watch how large economies draw the line between technology adoption and asset approval.
The Verdict: Blockchain In, Bitcoin Out — For Now
India’s position is best understood as a bet on the rails rather than the assets. The RBI wants the efficiency of distributed ledgers and programmable money without surrendering control over the currency itself. That approach could accelerate — tokenized bonds and digital rupee settlement are already moving from whitepapers to pilots — but it also means Indian crypto users should expect continued scrutiny, not a policy thaw. Malhotra’s speech listed tokenization and artificial intelligence among technologies that can improve financial efficiency, but only within safeguards that preserve settlement finality, financial integrity, and the singleness of money. For anyone holding crypto in India, that is the real headline: the technology is welcome, and the assets are still on probation.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
“promote the underlying technologies” while taxing crypto gains at 30% plus 1% tds. the RBI wants the rails without the trains, been their line since 2018
^ exactly. and meanwhile the tokenized bond pilots keep growing. theyre basically building cbdc infrastructure and calling it innovation
the 1 percent TDS point deserves more attention. you cannot build a liquid digital asset market when every single trade gets clipped at the source
Devika R. this. 30 percent plus 1 percent tds is why the volume sits on offshore exchanges. fix the tax code and the demand appears overnight
the TDS point and the bond pilots are the same problem. no domestic liquidity means the tokenized CDs just settle between banks and get called innovation
bank to bank settlement with a blockchain receipt is the whole pilot in one line. the day a retail bond clears on the e rupee rail i will eat my ledger
rails without the trains is exactly it. and until the 30 percent slab goes, every rupee of that demand stays on binance and bybit where the RBI sees none of it
the 30 percent slab does the RBI work for it honestly. no official touches crypto while every gain costs 30 percent at filing time
and the RBI probably has a clearer view of the bybit order books than the domestic ones at this point. capital finds its reporting either way, tds or no tds
the slab and the TDS both. every emigrant cousin i know buys usdt on an offshore app because the onshore tax math never made sense
honestly this is the most honest a central banker has been all year. cautious on crypto, bullish on the tech. at least he said the quiet part out loud
wouldnt call it honest, more like branding. the e rupee pilots went nowhere for two years and suddenly tokenized bonds are the story because crypto kept the lights on
two years of e rupee pilots and the usage numbers are still a state secret. tokenized bonds get the same silence by next conclave
programmable digital rupee settling tokenized CDs is a bigger deal than people think. layer cbdc settlement onto UPI rails and india quietly builds the most advanced payment stack on earth
tokenized bonds and programmable digital rupee but cautious on the actual asset. RBI wants the rails without the money, classic
@raghu the funny part is every pilot they run keeps needing the crypto side to prove demand exists first
every single time. the wholesale pilots settle fine and then someone asks where the retail demand is, its sitting on offshore exchanges because of the tax code
debasement_didi every pilot conclusion reads the same too, more study needed. they have been studying tokenized bonds since 2022
Malhotra is at least honest about it. The Kautilya Conclave crowd would never cheer for bitcoin on stage
honest maybe, but the fx reserves angle never comes up. every rupee sitting in crypto is a rupee off the central bank balance sheet and they know it
the conclave crowd clapping for tokenized CDs while the 30 percent slab keeps actual volumes offshore. promote the tech, starve the market, call it strategy
tokenized bonds and a programmable rupee on one hand, 30 percent slab on crypto gains on the other. want adoption but tax it like lottery tickets first
tokenized bonds settling in e rupee is a permissioned database with a press release. the cautious part is the only honest bit in the whole speech
permissioned database with a press release is brutal but accurate. programmable settlement they can switch off beats an asset they cannot unwind, thats the whole conclave speech in one line
permissioned is the whole feature for a central bank. e rupee bonds settle on rails where they can read every line, thats the actual product in that speech
permissioned with a press release is harsh but the fx reserves angle upthread is why they bother. rails they control beat assets they cannot