India is preparing to roll out a Reserve Bank of India (RBI)-backed digital currency, signalling a decisive policy shift toward regulated, sovereign-backed digital assets and away from speculative private cryptocurrencies.

Union Minister of Commerce and Industry Piyush Goyal confirmed the move during an event in Doha on Monday, according to an ANI report. The “RBI-guaranteed” digital rupee, Goyal said, will simplify transactions, reduce paper usage and enable faster, traceable payments compared to traditional banking systems.

Goyal made clear that while India has not imposed an outright ban on cryptocurrencies, it continues to discourage their use through heavy taxation. “We don’t want anybody to be stuck at some point with a cryptocurrency that has no backing and nobody at the backend,” he said, referring to unregulated tokens without sovereign or asset-based guarantees.

The announcement underscores India’s intent to reshape its digital finance landscape by prioritising trust, security and regulatory accountability over the freewheeling experimentation that has defined much of the global crypto sector.

Asia’s Crypto Hotspot Eyes Stricter Oversight

India remains one of the world’s most active crypto markets, alongside Pakistan and Vietnam. According to Chainalysis’s 2025 Global Adoption Index, the Asia-Pacific region saw digital asset transaction volumes soar from $1.4 trillion to $2.36 trillion year-over-year.

Despite this growth, Indian authorities appear determined to channel innovation toward state-sanctioned frameworks rather than allow unregulated expansion.

Raj Kapoor, founder and CEO of the India Blockchain Alliance, told Decrypt that Goyal’s announcement “reiterates that the government continues to see a central bank digital currency (CBDC) as a core plank of its fintech strategy.”

Kapoor described the phrase “backed by RBI guarantee” as more than rhetoric. “It’s a deliberate contrast,” he said, “between a state-issued digital currency, which has legitimacy and security and speculative tokens, meme coins, or ephemeral DeFi constructs lacking anchoring assets.”

He added that India is likely to implement a hybrid regulatory framework blending monetary and securities oversight. Under this system, crypto issuers would be required to maintain verifiable fiat or commodity reserves, hold them in regulated custody and undergo regular third-party audits.

From ‘Tax and Tolerate’ to Tiered Compliance

Kapoor characterised the minister’s remarks as a “clear pivot toward stricter oversight,” signalling the end of India’s previously ambivalent stance on crypto assets. The country’s “tax-and-tolerate” policy, where crypto transactions were taxed but not prohibited, is evolving into what he termed a “tiered compliance regime.”

This structure would favour regulated, asset-backed tokens while discouraging volatile, unbacked cryptocurrencies. “India is aligning its fintech vision with stability and accountability,” Kapoor noted.

The RBI has already piloted the digital rupee in both retail and wholesale segments, giving India an early advantage in CBDC implementation. These trials have focused on interoperability, transaction traceability and user accessibility, paving the way for a scalable national rollout.

Fintechs Told: Build With the State, Not Outside It

Industry experts say India’s move represents a clear signal to fintech innovators: collaborate with the state or risk exclusion.

“India’s plan for an RBI-backed digital rupee shows clear intent to merge trust with technology, similar to a state-guaranteed stablecoin,” said Monica Jasuja, Chief Expansion and Innovation Officer at Emerging Payments Association Asia.

“It signals confidence in regulated digital money over speculation and for fintechs, the message is clear: build with the state, not outside it,” she said.

Jasuja added that if India formally prioritises an RBI-issued digital rupee over private stablecoins, investors may perceive it as a safer but narrower opportunity. This could lead to capital shifting toward compliance-aligned ventures, such as regulated exchanges, tokenised asset platforms and CBDC-integrated payment systems, while speculative, crypto-native projects may face decline.

Questions Remain on Competition and Cross-Border Tokens

While experts broadly welcomed India’s proactive approach, some uncertainties linger. Kapoor questioned whether the regulatory burden for token issuers will be low enough to permit real competition, or whether it might entrench existing financial incumbents.

“Will the framework be open enough for startups to innovate within regulation, or will it tilt the field in favour of established institutions?” he asked.

Another open question involves how India will manage foreign stablecoins or cross-border token flows that do not comply with its “asset-backed” requirements. Given India’s growing influence in global fintech diplomacy, its approach could set a precedent for other emerging markets navigating the same balance between innovation and control.

A Digital Future Rooted in Sovereignty

India’s upcoming RBI-backed digital rupee marks a strategic convergence of monetary policy, technology, and regulation. By rooting digital finance within the state’s institutional framework, New Delhi aims to reclaim monetary sovereignty in the digital age, while offering citizens a trusted, efficient alternative to volatile cryptocurrencies.

As Goyal’s remarks and expert opinions indicate, India’s digital currency strategy is not just about replacing cash; it’s about reshaping the entire architecture of trust in digital money.

Whether this trust-driven model can coexist with open crypto innovation or crowd it out entirely will determine how India’s fintech ecosystem evolves in the years ahead.