In early July 2026 the Reserve Bank of India told Parliament's Standing Committee on Finance that virtual digital assets should not be legalised, and that building a regulatory framework for them would create a "false perception of safety". The RBI also recommended keeping banks away from crypto and private stablecoin exposure. The Institute of Chartered Accountants of India, appearing before the same committee, argued the opposite: that India needs a comprehensive VDA law.
What this means for you today is simple. Nothing in the rules changed. Testimony to a committee is an opinion on the record, not a law and not a ban. Buying, holding and selling Bitcoin in India is still not banned, it is still taxed at 30% on gains with 1% TDS, it is still unregulated as an asset, and platforms still have to register with FIU-IND. What the testimony does tell you is where the RBI stands in the debate about what comes next.
What the RBI told the committee
According to reports published on 3 July 2026, the RBI's case was made by Deputy Governor Rohit Jain and Executive Director P. Vasudevan before the committee chaired by Bhartruhari Mahtab. Three points stood out:
- VDAs should not be legalised.
- Regulating them would create a "false perception of safety" among the public.
- Banks should be barred from exposure to crypto and to private stablecoins.
If you have followed the RBI for a while, none of this is a surprise. The central bank has issued cautionary press notes about virtual currencies since 2013. I remember the first one well. It landed about two weeks after we launched Unocoin, and it was repeated later, and then a third time in 2018 when the RBI went further and told banks to stop serving crypto businesses.
What ICAI said
ICAI, the body for chartered accountants, told the same committee that a comprehensive law on VDAs is needed. That is worth paying attention to. The people who actually prepare tax returns for crypto users are the ones asking for clarity, because today they work inside a system that taxes these assets in detail without a law that governs them as a whole.
MP Raghav Chadha put the contradiction sharply in February 2026, when he said the government taxes VDAs as if they are legal but regulates them as if they are illegal. You do not have to agree with any one side to see the gap he was describing.
The numbers the RBI put on record
The most useful part of the testimony, for anyone trying to understand the size of this market, was the data. As reported, the RBI told the committee that India had:
- 54 service providers registered with FIU-IND,
- 39.3 million KYC-verified users,
- holding about ₹20,437 crore.
Read those numbers again. Tens of millions of Indians have done full KYC with PAN and Aadhaar to hold Bitcoin and other VDAs on registered platforms. This is not a fringe activity hidden in the shadows. It is a known, taxed, reported activity that the central bank itself can count.
Testimony vs law: what changes today
I have been in this industry in India since 2013, and the thing I wish more people understood is the difference between a view and a rule.
A rule is something like the 2018 RBI circular, which ordered banks to exit crypto relationships within three months. That one had teeth. It forced us to lay off about a hundred people. And even that rule was set aside by the Supreme Court on 4 March 2020 as disproportionate, although the Court confirmed the RBI does have power to regulate in this area.
Testimony to a committee is different. It goes into the committee's thinking, the committee writes a report, the government considers the report, and only then might something become a bill, which Parliament would then debate. Each of those steps can take months or years.
So today, after the testimony, the rules you live by are the same as the day before:
- Gains from transferring a VDA are taxed at a flat 30% under section 115BBH, plus surcharge and 4% cess. Losses cannot be set off against other income or carried forward.
- 1% TDS applies on transfers under section 194S, now section 393 under the Income-tax Act, 2025.
- Platforms must register with FIU-IND as reporting entities under the Prevention of Money Laundering Act, and do KYC.
- Crypto is unregulated as an asset. There is no dedicated law on governance, disclosure, investor protection or grievance redressal.
Check the tax points with a CA for your own situation. The tax guide walks through each one.
A memory about how this always works
On roughly the third day of Unocoin's business, about 30 people from the tax department showed up at our office. We had two employees. I still laugh about it, but the lesson stuck. The state was always going to take an interest in Bitcoin, and the only workable answer was to be ready for it.
Our philosophy from the start was that you cannot run from the government. You deal with them. So when I read that the RBI does not want VDAs legalised, my reaction is not panic. It is the same reaction I had in 2013: keep your records clean, follow the rules that exist, and make your case in the open.
What the committee did next
A few weeks later, the same committee's report on the Securities Markets Code was reported on 27 July 2026. It went in a different direction from the RBI. It recommended an appropriate regulatory framework for VDAs and, until a law exists, an interim arrangement through self-regulatory organisations under a regulator such as the RBI or SEBI. It called the exclusion of VDAs from the code a "regulatory grey area".
Those recommendations are advisory. They do not bind the government. But together with ICAI's submission, they show that the RBI's view is one voice in the room, not the final word.
What to watch next
- The committee's separate study on VDAs, and the government's response to it.
- Whether the government publishes its long-delayed discussion paper on crypto. As of this writing, it has not been published.
- Any instruction from the RBI to banks. That is the kind of document that changes daily life, as 2018 showed. Testimony is not.
- Tax reporting. From 2026, exchanges collect and report more transaction data under the Crypto-Asset Reporting Framework, so your ITR should match your platform records.
What I would do as a user
Keep doing the boring things. Use a platform registered with FIU-IND. Do your KYC inside the app, never over WhatsApp or a phone call, and never share your OTP, password, PAN or seed phrase with anyone who contacts you. Keep your transaction records for every sale. File Schedule VDA properly. Know how you would move your Bitcoin to your own wallet if you ever needed to.
None of that depends on what the RBI says next. It is how you stay calm when the headlines get loud.
If you want this kind of read every week, the news in plain words with the documents linked, sign up for the India Bitcoin Brief. For the history of the last time the RBI acted against the industry, read the Supreme Court story, and for how to check any platform, see what you can verify yourself.
Common questions
Is RBI banning crypto in 2026?
No ban has been issued. In July 2026 the RBI told a Parliament committee that VDAs should not be legalised, but testimony is not a law or an instruction to banks. Buying, holding and selling Bitcoin in India is not banned; it is taxed and unregulated as an asset.
What did the RBI tell Parliament about crypto?
As reported on 3 July 2026, the RBI told the Standing Committee on Finance that VDAs should not be legalised, that regulation would create a false perception of safety, and that banks should be barred from crypto and private stablecoin exposure. It also put on record 54 FIU-registered providers and 39.3 million KYC-verified users holding about ₹20,437 crore.
Is crypto legal after the RBI testimony?
The position is unchanged: crypto is not banned, gains are taxed at 30% under section 115BBH with 1% TDS, there is no dedicated crypto law, and platforms must register with FIU-IND under the PMLA.
Who decides India's crypto law?
Parliament makes laws. Committees and regulators such as the RBI give views and recommendations, and the government decides whether to bring a bill. The RBI can also issue instructions to the banks it regulates, as it did in 2018.