Though India topped the list of all countries when it comes to crypto adoption as per Chainalysis' 2025 Global Adoption Index, the country's central bank has reiterated its anti-crypto policy
Though India topped the list of all countries when it comes to crypto adoption as per Chainalysis' 2025 Global Adoption Index, the country's central bank has reiterated its anti-crypto policy.
The Reserve Bank of India (RBI) has doubled down on its long-held crypto policy "leaning towards prohibition" and the country's tax department has sounded alarm on offshore trading, Reuters reported on July 8.
The news agency claims it has seen government documents that back the claim.
The documents reveal that the national agencies are concerned about growing risks to India's financial stability due to crypto assets being traded without any clear regulation and prefer tighter curbs on these assets, Reuters said.
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The RBI suggested that central banks should refrain from trading or gaining exposure to crypto assets, including private stablecoins, to contain contagion risks.
Though Indian lenders are free to do so legally, they have avoided crypto exposure following the central bank's repeated alarm bells.
The RBI has never hidden its highly critical stance vis-à-vis cryptocurrencies, and has even tried banning them but a court order in 2021 struck down those policies.
Trending on TheStreet Roundtable:Meanwhile, the country's tax department is concerned with the misreporting of crypto holdings in tax filings, as the documents seen by Reuters revealed.
Less than 25% of the 645,000 individuals who executed crypto transactions in the financial year ending in March 2023 reported them in their filings, as per the department.
The department also finds it difficult to track profitable owners because it's no easy task to track crypto transactions on overseas exchanges and private wallets.
As per the department's estimates, India has nearly 39 million crypto traders who held about $2.1 billion in digital assets at the end of May 2026.
The Indian government has not implemented a comprehensive regulatory framework for crypto assets but has an aggressive tax regime: 30% flat tax on gains and 1% tax deducted at source (TDS) on transactions.
The government even considered introducing a bill in 2021 to effectively ban all private cryptocurrencies in the country but eventually decided to hold back.
But if the central bank and the tax department influence the government's virtual digital asset policy, Indian crypto users could be in trouble.
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