Not having a policy is a policy: RBI to Parliamentary panel on crypto

RBI tells House panel it's not in favour of VDAs as currency

The Reserve Bank of India (RBI) on Thursday told the Parliamentary Standing Committee on Finance that it is not in favour of treating virtual digital assets (VDAs) as currency, but did not immediately clarify whether they could be treated as securities. 

“The Securities and Exchange Board of India (Sebi) has made comments earlier that if it is treated as securities, they can play the regulator’s role. However, when asked by members, RBI officials didn’t resp­ond immediately and said they will get back in writing on the matter later,” a member of the committee said requesting anonymity as the deliberations are confidential. 

The Parliamentary panel is preparing a report on “A Study on Virtual Digital Assets (VDAs) and Way Forward” that it plans to submit to Parliament in the upcoming monsoon session. “We already have had seven rounds of discussion including with the Department of Economic Affairs, the Central Board of Direct Taxes, Department of Commerce, other government organisations and registered VDAs. We will have another round of discussion with DEA on July 15 before finalising our recommendations,” the member said. 

When the members enquired the RBI officials that how can India have an “ostrich-like approach” when there is flight of capital and other Asian territories including Indonesia, Hong Kong, and United Arab Emirates are regulating VDAs, the RBI officials suggested that “not having a policy is also a policy”. 

RBI officials reiterated their longstanding opposition to regulating VDAs, arguing that they pose risks of illicit financing, including for drug trafficking and terrorist activities. 

 “Some members were of the view that India can have its own methodology of regulating VDAs. If not the US way of regulating crypto, we can look at EU regulations,” the member said.   

 The EU regulates crypto through a single, comprehensive law — the Markets in Crypto-Assets Regulation (MiCA). In contrast, the United States takes a fragmented, case-by-case approach, relying on existing laws and overlapping authorities like the Securities and Exchange Commission and Commodity Futures Trading Commission.  The Panel also met representatives from Institute of Chartered Accountants of India (ICAI) on the subject who told the members that conducting forensic audit of VDAs is possible.