India is reportedly holding back on clear cryptocurrency rules as the Reserve Bank of India warns that regulation could make digital assets official and bring risks to the financial system.
According to a report from Reuters, controlling risks through regulation would be very difficult. The report adds that regulating crypto could legitimize the sector and “may cause the sector to become systemic.” It also notes that banning crypto can limit risks from speculative assets but cannot stop peer-to-peer trades or transactions on decentralized exchanges.
The country currently applies partial oversight for cryptocurrencies. For instance, India charges a 30% tax on crypto gains and asks foreign exchanges to register with local authorities.
In late 2023, India’s Financial Intelligence Unit requested that global exchanges such as Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex to pause operations for not completing local registration.
However, some exchanges, like Binance and KuCoin, returned in 2024 after getting approval from regulators. Local crypto businesses must also follow Anti-Money Laundering rules
Despite the cautious approach, India leads in crypto adoption according to Chainalysis’ 2025 Geography of Crypto report. Minister Jayant Chaudhary disclosed his crypto holdings grew by 19% to about $25,500.
Industry leaders say adoption numbers do not fully match usage. “The fact that metrics say one thing, and reality presents a contrasting image, suggests that India stands at a paradoxical crossroads,” said Mithil Thakore, CEO of crypto platform Velar.
India has taken a careful approach to crypto. For instance, In 2023, during its G20 presidency, India asked for global crypto regulations. In 2024, the government postponed a discussion paper to U.S. policies.
Meanwhile, Japan and Australia are slowly creating crypto rules. At the same time, China still bans crypto but is testing a digital Yuan.
The U.S. on the other hand has passed a law allowing stablecoins, which are digital coins linked to the dollar, making it easier to use and helping crypto adoption grow globally.
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