The deputy governor of the Reserve Bank of India is concerned.

Apart from the riskof capital loss that all cryptocurrency

investors face, many of these use caseswere frowned upon by the regulator. The RBI has tried to encourage a total banon cryptocurrency.

"There arealready evidence that private cross-border flows in cryptocurrencies are takingplace," RBI deputy governor T Rabi Sankar said in a February address.

"If this trendcontinues, some trade payments, personal remittances, and cross-borderinvestments will be made in these cryptocurrencies." Because they arenon-reserve currencies, this might have a detrimental impact on India's foreigncurrency reserves, hence stabilising the foreign sector," Rabi Sankarexplained. He had also warned of the risks to macroeconomic stability posed bysuch transfers, which might erode policy control over capital.

According to legalexperts, there are stringent reporting requirements for cross-border moneyflows. "However, the usage of cryptocurrency as payment for services orduring overseas travel will be outside the scope of the current reportingframework," said L Badri Narayanan, managing partner of Lakshmikumaran& Sridharan Attorneys.

"In the case ofIndian services, foreign exchange restrictions mandate appraisal in foreigncurrencies in India." "Buying cryptocurrency instead of foreign cashwould be a violation of ex regulations," he explained.