India appears inclined to avoid enacting comprehensive cryptocurrency legislation, opting instead for limited regulatory oversight.
According to a government document reviewed by Reuters, authorities fear that integrating digital assets into the formal financial system could introduce systemic vulnerabilities.
The document highlights the Reserve Bank of India’s (RBI) stance that effectively mitigating cryptocurrency-related risks through regulation alone would be challenging in practice.
Global cryptocurrency adoption has accelerated since U.S. President Donald Trump took office, with Bitcoin the world’s largest digital asset by market capitalization reaching record valuation levels.
The United States has also introduced legislation enabling the broader use of stable coins, digital tokens backed by fiat currencies to reduce price volatility. Meanwhile, China continues to enforce a ban on cryptocurrencies but is reportedly exploring a Yuan-pegged stable coin, according to Reuters.
In contrast, Japan and Australia are in the process of building regulatory frameworks for virtual assets, maintaining a measured and cautious approach rather than aggressively promoting the sector.
According to a government document prepared this month, introducing cryptocurrency regulations in India could confer unintended “legitimacy” on digital assets and potentially make the sector systemically significant.
Conversely, while an outright prohibition could address the speculative and high-risk nature of cryptocurrencies, it would fail to curb peer-to-peer transactions or decentralized exchange (DEX) activity, the document noted.
These internal assessments mark the first formal articulation of India’s evolving crypto policy stance. Both the Ministry of Finance and the Reserve Bank of India (RBI) declined to comment on Reuters’ queries.
India had earlier drafted a 2021 bill to ban private cryptocurrencies, but the legislation was never enacted.
During its G20 presidency in 2023, India advocated for a globally coordinated regulatory framework for digital assets.
In 2024, the government planned to release a discussion paper outlining its crypto policy, but deferred the move pending U.S. regulatory developments and the formal adoption of stable coin oversight mechanisms.
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