India's RBI plans digital currency to replace unregulated cryptocurrencies

India will introduce a sovereign-backed digital currency under the Reserve Bank of India (RBI), as it discourages the use of private cryptocurrencies due to their lack of asset “backing.” 

According to an announcement made Monday by Union Minister of Commerce and Industry Piyush Goyal in Doha, India’s digital currency would carry the same guarantee as traditional money, albeit entirely in electronic form. 

The Minister said the RBI-backed currency is similar to stablecoins in the US, regulated under the GENIUS Act. He explained that the Indian model would be fully backed by the country’s central bank, which would make it more secure and reliable than privately issued cryptos.

Minister criticizes cryptocurrencies ‘without backing’

Speaking to attendees of India’s United Payments Interface launch event in Qatar, Goyal repeated the government’s sentiments, bashing assets like Bitcoin and Ethereum, which operate without sovereign or asset backing. 

“We have not been encouraging cryptocurrency which does not have sovereign backing or which is not backed by assets, say it on the federal bank or local currency,” he remarked.

The Minister warned that private digital assets have inherent risks because “there’s no backend guaranteeing any value,” adding, “Suppose tomorrow there’s no buyer, there’s nobody to guarantee. It’s a thing you can do at your own risk and cost. The government doesn’t encourage or discourage. We only tax it.”

India is still among the world’s most active crypto markets, according to the 2025 Global Adoption Index by blockchain analytics firm Chainalysis. The country’s on-chain value received in the 12 months ending June this year grew by 99%, only behind Japan, Indonesia, and South Korea.

The report shows that the Asia-Pacific region recorded a sharp increase in digital asset transactions, climbing from $1.4 trillion to $2.36 trillion year-over-year. Much of this growth was aided by individual users and small businesses experimenting with decentralized finance (DeFi) platforms and cross-border transfers.

India has not banned or legalized crypto

As Guyol confirmed, the RBI introduced taxes on digital currency transactions, but the central bank has yet to impose regulations that would formally recognize or legitimize them.

Cryptocurrencies were not mentioned in the 22 financial reforms announced by the RBI last week. With no dedicated legal framework, crypto in India is not officially banned, but it’s not fully accepted either.

Officials believe introducing a formal regulatory structure could inadvertently validate digital currencies and expose traders to unsecured volatility. According to Goyal, the RBI-backed digital currency is better as it would make daily commerce more efficient in tandem with India’s digitization ambitions.

The RBI’s digital currency will be fully traceable and governed by monetary authorities. Goyal suggested the traceability would prevent misuse of funds and uphold the RBI’s anti-money-laundering and counter-terrorism financing regulations.

Goyal engages economy talks in Doha 

Goyal’s comments on digital currency came on the backdrop of his trade discussions in Doha, where he led a business delegation to expand bilateral investment between India and Qatar. He confirmed that India and Qatar have agreed to accelerate negotiations for a Free Trade Agreement (FTA) and strengthen economic ties within the Gulf Cooperation Council (GCC).

“I would think that sometime by the middle of next year, or third quarter of next year, we will be able to finalize an FTA, if not earlier,” he told reporters.

The GCC, consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, is one of India’s key trading blocs. According to The Hindu, India’s bilateral trade with Qatar reached $14.15 billion in the 2024–25 fiscal year.

India has already concluded a trade pact with the UAE and could finalize a similar deal with Oman before curtains close on 2025. Minister Goyal met with his Qatari counterpart, Sheikh Faisal bin Thani bin Faisal Al Thani, yesterday, who agreed to expedite trade negotiations.

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