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India's central bank revives push to isolate banking system from crypto
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- DeepHorus
India's central bank has revived its push to isolate the banking system from cryptocurrency, urging lawmakers to prohibit the use of digital assets in payments and settlements. Reserve Bank of India Deputy Governor Rohit Jain and Executive Director P. Vasudevan presented the bank's position to the Parliamentary Standing Committee on Finance, according to a report by The Economic Times. The move reignites the long-standing debate over crypto regulation in India, where the RBI has historically favored a ban over oversight.
The RBI submitted a background note to the panel, stating that prohibition remains a recognized policy option. It recommended preventing crypto use in payments and limiting banking-sector exposure to cryptocurrencies. The central bank warned that applying traditional financial regulation to crypto could legitimize speculative assets and create a false sense of safety among users. However, it urged policymakers to distinguish crypto from tokenized government securities and corporate bonds to avoid hindering regulated tokenization.
The RBI's stance contrasts with developments in other parts of Asia. While India tightens restrictions, Russia is moving forward with its central bank digital currency, the digital ruble, scheduled for launch on Sept. 1. Central bank governor Elvira Nabiullina confirmed readiness, despite preemptive sanctions from the European Union. The digital ruble will initially be accepted by financial and credit institutions as a complement to the fiat ruble.
In Japan, SBI Crypto, a subsidiary of financial conglomerate SBI, announced the shutdown of its Bitcoin mining pool after five years of operation. The pool is currently the 12th largest globally, with a hashrate of 21.46 EH/s and roughly 2.24% of total Bitcoin network share. Operations will cease on July 31, and the company urged miners to continue directing hashrate until the cutoff for accurate final payouts.
Globally, regulatory pressure on crypto continues to intensify. The U.S. Treasury's Office of Foreign Assets Control sanctioned 134 cryptocurrency wallet addresses linked to the terrorist group ISIS-Khorasan. Stablecoin issuer Tether froze funds associated with 131 Tron addresses, while three sanctioned addresses were on the Monero network. This action follows a previous round of sanctions against ISIS-financing operatives in June.
The cumulative effect of these developments points to a fragmented global regulatory landscape. While some nations like Russia embrace CBDCs, others like India push for isolation, and authorities worldwide target illicit use. The future of crypto will likely be shaped by these divergent approaches, with the industry facing increased scrutiny and compliance requirements.
