New Delhi, India — In a recent policy shift confirmed this September, India has opted against implementing a sweeping cryptocurrency law. Instead, the country is electing to maintain a partial regulatory model—primarily relying on taxation, reporting mandates, and selective oversight—to mitigate potential systemic threats posed by digital assets.
At the heart of this decision is the Reserve Bank of India’s long-standing scepticism about integrating cryptocurrencies into the mainstream financial system. Officials argue that legitimizing the sector through formal legislation might inadvertently fast-track its adoption—thus heightening systemic risks across financial institutions.
To curb speculative trading without issuing a full ban, the government imposes a steep 30% tax on crypto profits and enforces a 1% tax deducted at source (TDS) on transactions. These fiscal measures have significantly dampened domestic trading volumes.
Yet regional adoption is far from negligible: Indians are estimated to hold roughly $4.5 billion in digital assets, and the country continues to rank high on global crypto adoption indexes.
Crypto activities are still permitted under constrained conditions. For example, global exchanges can resume operations following compliance with regulatory penalties—evidenced by one platform’s return after paying a fine of ₹9.27 crore (approximately $1.06 million).
Although these tight rules help minimize risks, they have not satiated the demands of industry stakeholders. India’s Supreme Court recently called for unequivocal crypto regulations, noting that current policies—including taxes and TDS—create an implicit form of recognition for cryptocurrencies. Meanwhile, the Central Board of Direct Taxes is seeking clarity from exchanges on whether current taxation and compliance structures sufficiently address derivatives and cross-border trades.
Industry voices, such as the CEO of CoinDCX, are urging the creation of a parliamentary committee and a dedicated Web3 task force to draft a more cohesive and forward-looking policy framework aligned with global standards.
Looking ahead, India has committed to implementing the OECD’s Crypto-Asset Reporting Framework (CARF) by April 2027. This international measure will require automatic, cross-border reporting of crypto transactions—reflecting New Delhi’s emphasis on strengthening transparency rather than fully legitimizing digital assets.
Historically, India’s stance on cryptocurrencies has seen dramatic shifts. In 2021, a draft bill proposing a ban on private cryptocurrencies was drafted but never presented in Parliament. During its 2023 G20 presidency, the country instead advocated for a global regulatory standard. A discussion paper on domestic regulation was postponed in 2024 pending clarity from the United States, which since then has advanced its own federal regulation via the GENIUS Act.
In summary, India continues to tread carefully on cryptocurrency. Rather than formal endorsement, the strategy remains one of containment—employing taxes and rigid oversight to keep digital assets at arm’s length from mainstream financial channels, while still acknowledging their growing prevalence.
