India has abandoned global crypto regulation due to concerns about systemic risks

Key points:

• The Reserve Bank of India is skeptical about the need for legislation for the crypto market.
• Despite restrictions, cryptocurrency adoption remains high.

The Indian government has decided not to adopt comprehensive laws regulating cryptocurrencies, opting instead for selective control over this area. According to Reuters, the Reserve Bank of India (RBI) believes that managing the risks of the cryptocurrency market through regulation will be an extremely difficult task.

Current rules regarding cryptocurrencies in India

Although India does not have a separate law on cryptocurrencies, it already has a 30% tax on digital asset gains and requires foreign cryptocurrency exchanges to register with local regulators.

At the end of 2023, India’s Financial Intelligence Unit (FIU) demanded that Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex blocked for not being registered.

Binance and KuCoin returned to the country in 2024 after receiving FIU approval to provide their services in India. Regulators are also introducing anti-money laundering (AML) rules for local crypto companies.

The growing prevalence of cryptocurrencies in India

Despite the cautious stance of the authorities, India is a global leader in the prevalence of cryptocurrencies. Chainalysis’ “2025 Geography of Cryptocurrency Report” showed that India leads in terms of cryptocurrency prevalence in all categories.

Source: Chainalysis

Government officials have also disclosed information about their assets. Minister Jayant Chaudhary reported that his crypto portfolio grew by 19% to approximately $25 500.

However, industry analysts point to a gap between adoption rates and actual cryptocurrency usage. Mithil Thakore, CEO of crypto platform Velar, noted:

“The fact that metrics say one thing, and reality presents a contrasting image, suggests that India stands at a paradoxical crossroads.”

Earlier, India’s Central Board of Direct Taxes (CBDT) tightened control over cryptocurrency taxation, identifying undeclared assets and liquidity shortages.