The Indian central bank supports the cryptocurrency ban, and the tax department warns of tax evasion risks

According to Reuters, the Reserve Bank of India reiterated its call for a "tendency to ban" cryptocurrency policies, while the country's tax department warned that transactions conducted through offshore exchanges are difficult to trace. These documents reveal that, although the government has not yet implemented policies to ban or regulate cryptocurrency, major government agencies in India tend to favor stricter restrictions on virtual digital assets.

Since a court ruling in 2018 declared the Reserve Bank of India's (RBI) policy effectively banning cryptocurrency invalid, India has allowed cryptocurrency to remain in a gray area. Legislation drafted in 2021 aimed at banning private cryptocurrencies was never submitted for parliamentary consideration, and a discussion paper on the topic has also been postponed multiple times. The government has delayed the implementation of a formal virtual asset policy, stating that any plan should balance innovation and risk management while protecting monetary sovereignty, financial stability, and preventing consumer losses.