India backs blockchain tools, stays wary of crypto assets, says RBI chief

India's central bank says it will promote blockchain and tokenisation while keeping a careful eye on cryptocurrencies because of worries about monetary sovereignty, policy control and capital flows. Governor Sanjay Malhotra made the comments on Oct 3, 2026 at the Kautilya Economic Conclave. He noted that the RBI is already using distributed ledger tools in its own operations and in public‑private partnerships. He added that cryptocurrencies pose a risk to the “singleness of money” and could affect how the bank manages inflation and interest rates, especially in emerging markets that limit capital movements. Domestic payment systems, he said, are already fast, cheap and convenient, so the bigger challenge lies in cross‑border payments. For those, the RBI is looking at alternatives such as central bank digital currencies. On global bond markets, Malhotra linked higher yields to tighter money supply and rising spending by governments and private firms, including AI‑driven projects. He warned that while the RBI focuses on domestic growth‑inflation balance, global interest‑rate trends also shape real rates in India and must be monitored. ## Context Distributed ledger technology is a digital record system that multiple parties can update without a single authority. Central bank digital currencies are sovereign digital money that can settle cross‑border transactions faster than traditional systems. Emerging‑market economies often restrict capital flows to protect their currencies, so assets that move value abroad raise policy concerns.