India’s Cryptocurrency Policy Paper Put on Hold Amid RBI Resistance

Cryptocurrency Regulation in India: Discussion Paper Delayed Indefinitely

The Department of Economic Affairs (DEA) under the finance ministry's long-awaited discussion paper on cryptocurrencies in India has been put on the backburner indefinitely, according to two government officials speaking to Moneycontrol. Since 2023, an inter-ministerial group, led by the finance ministry, had been working on the discussion paper to outline the government's stance on cryptocurrencies.

The paper was expected to highlight the potential technological benefits of cryptocurrency, particularly for stablecoins, without taking a definitive stand on regulation. However, officials believe that existing measures are sufficient to keep the sector in check. One of the key reasons for the delay is the continued resistance from the Reserve Bank of India (RBI), which remains sceptical of cryptocurrencies, including stablecoins, due to concerns over systemic risks.

The government has already imposed taxation on virtual digital assets, while the Financial Intelligence Unit (FIU) has brought crypto entities under anti-money laundering norms, steps that provide a degree of monitoring even in the absence of a formal regulatory framework. The RBI and the Securities and Exchange Board of India are among the regulators who are part of the committee that shared inputs for the paper.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The RBI has repeatedly flagged threats to financial stability, monetary policy transmission, and capital controls. The policy focus has instead shifted toward promoting the central bank digital currency (CBDC), with India's CBDC initiative, the digital rupee, being positioned as the preferred alternative to private cryptocurrencies. Officials said the RBI and the Department of Financial Services (DFS) are working to integrate CBDC more deeply across banking channels and government schemes to drive adoption.

The delay in the DEA-led paper is also linked to rapidly evolving global developments in the crypto space. An earlier effort by an Inter-Ministerial Committee (IMC), which had finalised a draft report, was effectively overtaken by international regulatory and market changes. The IMC had prepared a draft some time ago, but global developments moved far ahead of the conclusions drawn in that paper, making it less relevant.

In July 2025, America introduced the Guiding and Establishing National Innovation for US Stablecoins Act, or the GENIUS Act, to establish a regulatory framework for dollar-backed payment for stablecoin issuers. The Act would likely take effect from January 2027. Both the potential benefits and risks of cryptocurrencies remain difficult to fully assess, including in the case of stablecoins. For now, while taxation and financial surveillance provide a degree of oversight, a broader policy framework remains elusive, with no clear timeline on when the DEA's discussion paper may be revived.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Cryptocurrencies in India have been subject to much scrutiny, with the central bank prohibiting lenders and other financial intermediaries from dealing with crypto users or exchanges in April 2018. However, this ban was struck down by the Supreme Court in 2020. Though the government prepared a bill on cryptocurrencies in 2021 that proposed a ban on private cryptocurrencies, it has not been introduced.