India is reassessing its approach to cryptocurrency regulation as global policies shift towards a more accommodative stance. Economic Affairs Secretary Ajay Seth recently acknowledged the need for a collaborative approach to digital asset regulation, citing the borderless nature of cryptocurrencies. This policy review comes as nations like the United States adopt more crypto-friendly regulations under the Trump administration.
Breaking🚨- Crypto in India 🇮🇳 has very little consensus to be used as a “currency” but it's an “asset”- says the Economic Affairs Secretary Ajay Seth.
— KoinX (@getkoinx) February 4, 2023
“Blockchain & distributed ledger technology has more use cases in the non-financial sector than financial sector”. pic.twitter.com/SMz2bhy1q3
The Indian government had initially planned to release a discussion paper on cryptocurrency regulations by September 2024. However, this reevaluation could push the timeline further. Despite India's strict crypto taxation and regulatory scrutiny, investment in digital assets continues to surge.
In December 2023, the Financial Intelligence Unit (FIU) issued show-cause notices to nine offshore crypto exchanges for non-compliance with local regulations. Among them, Binance, the world’s largest exchange, faced a fine of 188.2 million rupees ($2.25 million) in June 2024 after registering with the FIU to resume operations in India.
Conflicting Views Within Indian Regulators
India’s regulatory landscape presents contrasting perspectives on digital assets. The Securities and Exchange Board of India (SEBI) has suggested a framework where multiple regulators oversee cryptocurrency trading. This proposal indicates a potential openness to private cryptocurrencies under structured oversight.
However, the Reserve Bank of India (RBI) remains skeptical, arguing that private digital currencies pose macroeconomic risks. The central bank has consistently advocated for a central bank digital currency (CBDC) while maintaining strict oversight on private crypto transactions.
🇮🇳 “We are having a look at the discussion paper for Crypto once again.”
— Sapna Singh (@earnwithsapna) February 2, 2025
— Ajay Seth, India’s Economic Affairs Secretary pic.twitter.com/FhPMXbBZH9
India’s reconsideration of its crypto stance aligns with a broader international trend. Countries like the U.S. have begun integrating cryptocurrencies into their financial systems through clearer regulations. The shift in global policy has pressured India to reassess its approach to avoid missing out on innovation and investment opportunities in the blockchain sector.
The outcome of this policy review could significantly impact crypto adoption in India, determining whether the country strengthens its grip on the sector or opens the door to a more progressive regulatory framework.
HODL Team
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