Quick Takeaways
- RBI warns that formal crypto rules could give digital assets unwanted credibility.
- India has taxes and compliance requirements, but no official crypto framework.
- Adoption is booming even government officials are investing in crypto.
Why India’s Holding Back on Crypto Rules (For Now)
Let’s face it: crypto is booming in India. But if you’re wondering why the government hasn’t rolled out any clear crypto rules, the answer lies with the country’s central bank and they’re not exactly sold on the idea.
According to a Reuters report, the Reserve Bank of India (RBI) believes that regulating crypto could do more harm than good. In fact, internal documents reveal that RBI thinks official crypto rules might end up making the sector look safer and more legitimate than it actually is.
From the RBI’s perspective, that’s risky. Giving crypto a stamp of regulatory approval might open the door to broader use across the economy which could eventually pose systemic threats.
A total ban might seem like the obvious alternative, right? Well, not quite. Even if cryptocurrency trading were outlawed, the RBI notes, people would probably simply switch to peer-to-peer transfers or decentralized platforms, which are very difficult to stop. India is therefore currently confined to a state of wait and watch.
The Crypto Rules India Does Have
While India hasn’t launched any all-in-one crypto rules, it hasn’t exactly ignored the sector either. There are already a few tough policies in place.
For starters, if you’re trading or investing in crypto in India, you’ll be hit with a 30% tax on your profits no deductions, no loopholes.
And if you’re a foreign crypto exchange wanting to do business in India? You’ll need to register with the Financial Intelligence Unit (FIU).
In late 2023, the FIU cracked down on big international exchanges like Binance, KuCoin, Kraken, and Bitfinex for failing to register. Some of them got blocked.
Yet, at the start of 2024, the two exchanges returned after completing the necessary documentation and having it approved by the regulation authorities: Binance and KuCoin .
Furthermore, any cryptocurrency business within the territory of India is required to comply with Anti-Money Laundering regulations.
Therefore, despite the absence of formal regulations on cryptocurrency, these varying policies create a framework that is, for the time being, regulating the industry .
Crypto Rules Are Missing, But Adoption Is Sky-High
Here’s the interesting part: even without full crypto rules, India is leading the world in crypto adoption. According to Chainalysis’s 2025 Geography of Crypto Report, India is number one across the board from everyday users to large institutions.
Even politicians are getting involved. Minister Jayant Chaudhary recently revealed that his personal crypto portfolio jumped 19% in value, hitting about $25,500. That’s a pretty public vote of confidence in a sector that’s still in regulatory limbo.
But not everyone’s buying the hype. Mithil Thakore, CEO of crypto platform Velar, said that just because the data shows high adoption doesn’t mean people are using crypto in meaningful ways.
“It appears that India is at a paradoxical crossroads because metrics indicate one thing while reality paints a different picture,” he said.
So yes, the interest is there. But the lack of clear crypto rules may be stopping the ecosystem from maturing the way it could.
