The Parliamentary Standing Committee on Finance is set to hold formal consultations with senior officials of the Reserve Bank of India (RBI) on 2 July in New Delhi, focusing on the future regulatory framework for cryptocurrencies and virtual digital assets (VDAs). The session, structured as an oral evidence hearing, will examine the subject titled 'A Study on Virtual Digital Assets (VDAs) and Way Forward'.

What the Committee Will Examine

Following the RBI session, the committee will separately engage with the Institute of Chartered Accountants of India (ICAI) on crypto-related taxation norms and broader regulatory questions. The back-to-back consultations signal a structured effort to build a comprehensive legislative picture before any formal recommendations are tabled.

The panel had previously met both domestic and global crypto exchanges operating in India. On 20 May, it convened with crypto exchanges in Delhi to discuss the scope of regulations, the path ahead for the VDA industry, and taxation policy — making the upcoming RBI meeting the next step in a sequenced review.

Where the RBI and Government Stand

The RBI and the Finance Ministry have consistently maintained a cautious stance on digital currencies, citing risks of money laundering, terror financing, and broader economic destabilisation. In November 2025, RBI Governor Sanjay Malhotra stated plainly: 'Stablecoins, cryptos, they have a huge risk, and so we are adopting a very cautious approach towards it.'

Finance Minister Nirmala Sitharaman has drawn a firm line between taxation and legitimacy — cryptocurrencies are treated as taxable assets, not legal tender. Under current Indian law, VDAs attract a flat 30% tax on profits and a 1% tax deducted at source (TDS). Sitharaman has made clear that taxing these instruments does not confer legal-currency status upon them, as genuine currency must be issued by a central bank or government.

The Global Regulation Argument

Sitharaman has also argued that cryptocurrency regulation cannot be managed unilaterally and requires a coordinated global framework to effectively counter money laundering, drug trafficking, and terrorist financing. This position aligns India with a growing number of economies that have resisted moving ahead of international consensus on crypto governance.

Limits of the Committee's Role

A senior official noted that while the parliamentary standing committee has the authority to make recommendations, those recommendations are not binding on the government. The committee's findings will nonetheless carry political and policy weight, particularly as India's crypto taxation regime faces criticism from industry for being among the most restrictive globally.

With the 2 July hearing now confirmed, the panel's deliberations with the RBI are expected to shape the contours of whatever regulatory or legislative proposal emerges from this process.