RBI Warns Against Crypto Legitimization
Indian regulators are reportedly holding back from introducing comprehensive crypto rules, fearing that regulation could legitimize digital assets and create systemic financial risks.
According to a Wednesday Reuters report citing official documents, the Reserve Bank of India (RBI) maintains that containing crypto-related risks through regulation would be challenging. The documents reportedly warn that introducing rules would legitimize cryptocurrencies and “cause the sector to become systemic.”
The report adds that an outright ban could address speculative risks but would fail to stop peer-to-peer trading and activity on decentralized exchanges.
India’s Current Crypto Rules
India does not yet have comprehensive crypto legislation, but it enforces strict measures. The government levies a 30% tax on digital asset gains and requires foreign exchanges to register with local regulators before operating.
In late 2023, India’s Financial Intelligence Unit (FIU) requested blocks on major global exchanges — including Binance, KuCoin, Huobi, Kraken, and others — for failing to register. Binance and KuCoin resumed operations in 2024 after receiving FIU approval. Locally operating crypto firms must also follow Anti-Money Laundering (AML) rules.
Rising Crypto Adoption in India
Despite the country’s cautious stance, India leads the world in crypto adoption, according to the 2025 Geography of Crypto Report by Chainalysis. The report shows India topping all categories of adoption.
Some government officials have even disclosed holdings. Minister Jayant Chaudhary revealed his crypto portfolio grew 19% in 2024, reaching roughly $25,500.
Still, industry experts say there’s a gap between statistical adoption and real-world 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.
Global Coordination Likely to Delay Rules
India has repeatedly emphasized its preference for a globally coordinated regulatory framework. Its participation in G20 discussions suggests that any domestic rules may take longer to finalize as policymakers await international consensus.
