The committee's report on cybercrime states that cryptocurrencies are often used for fraud, money laundering, and organized crime. This includes cryptojacking (using someone else's devices for cryptocurrency mining), investment crypto schemes, extortion, as well as purchasing drugs and weapons on the darknet for cryptocurrencies.
According to the Ministry of Home Affairs of India, from 2019 to 2024, more than 5.3 million complaints about cybercrime were received by the police. 85% of these were related to financial fraud involving cryptocurrencies. The total damage suffered during this period exceeded 31,500 crore rupees (approximately $3.8 billion).
Nevertheless, the committee considers a complete ban on cryptocurrencies to be ineffective. It recommended that cryptocurrency exchanges be required to obtain a license to operate in the country and comply with the requirements of the Financial Action Task Force (FATF). Cryptocurrency companies must also adhere to anti-money laundering (AML) rules and customer identification procedures (KYC).
The committee proposed recognizing cryptocurrencies as 'digital assets' under the Foreign Exchange Management Act (FEMA), and also acknowledged the payment potential of stablecoins pegged to the Indian rupee, but emphasized that their regulation should be the responsibility of the Reserve Bank of India (RBI).
Meanwhile, the Reserve Bank of India continues work on the pilot project for a digital rupee (CBDC). In June, the regulator announced the addition of new functionality to its own digital currency and an increase in the number of testing participants.