On September 17, 2025, Reuters published an India File newsletter analysis highlighting the country’s nuanced approach to cryptocurrencies. India remains cautious, avoiding outright bans while resisting broad regulatory frameworks, aiming to shield consumers from market volatility and potential financial risks without stifling innovation entirely.
The Reserve Bank of India (RBI) has repeatedly warned about cryptocurrencies’ dangers, citing concerns over money laundering, fraud, and macroeconomic stability. Despite the Supreme Court overturning the RBI’s earlier de facto ban on crypto trading for disproportionality reasons, the central bank continues to discourage digital asset use and highlights the lack of consumer protections.
Conversely, the Securities and Exchange Board of India (SEBI) has expressed interest in regulating crypto assets, acknowledging their growing mainstream presence. SEBI’s tentative openness includes exploring stablecoin frameworks and investor protection measures. However, the central bank’s reticence has prevailed, keeping formal legislation on crypto pending.
India’s government has opted for a wait-and-watch policy, believing detailed regulation could legitimize crypto while failing to mitigate its inherent risks. This stance contrasts with global trends where jurisdictions have implemented robust frameworks for digital asset licensing, taxation, and investor safeguards to foster industry growth.
The analysis notes that while India’s $4 trillion crypto market capitalization remains significant, the country’s investors bear high volatility without structured regulatory recourse. Household exposures remain limited at roughly $4.5 billion, suggesting retail participation is economically modest but culturally prominent among younger demographics.
Critics argue that India’s regulatory limbo risks losing talent and investment to more crypto-friendly markets. Supporters counter that prioritizing financial stability and consumer protection aligns with national interests, especially given low financial literacy rates. The debate continues as policymakers consider balancing innovation with risk management.
India’s cautious approach illustrates the complexities facing emerging economies integrating decentralized finance within traditional banking and monetary systems. The ultimate regulatory path will shape India’s role in the global crypto ecosystem and influence broader policy debates on digital asset governance.
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