After years of regulatory uncertainty and a cautious stance, India appears ready to make a definitive move on cryptocurrency regulation. The government is reportedly preparing to release a discussion paper on crypto policy in June, a development keenly watched by the global industry. This potential shift comes as the worldwide crypto market experiences renewed vigor, with Bitcoin recently touching a new all-time high.
The impetus for this long-awaited clarity isn’t solely market-driven. India’s Supreme Court has vehemently criticized the government’s prolonged silence on crypto regulation, warning that the existing legal vacuum fosters misuse and asserting that an outright ban is not the solution. A bench led by Justices Surya Kant and N. Kotiswar Singh questioned India’s delay when other major economies are actively developing their own regulatory frameworks.
This upcoming discussion paper is seen as a direct response to the court’s pressure. Reports suggest the proposal will draw heavily from the International Monetary Fund (IMF) and Financial Stability Board (FSB) synthesis report. Crucially, there are indications it may invite public input, allowing stakeholders to contribute to shaping India’s crypto future.
India’s journey with crypto has been fraught with challenges. The 2023 budget introduced a stringent 30% tax on crypto profits, pushing many users and exchanges offshore. While firms were mandated to register with the Financial Intelligence Unit (FIU), the sector still lacks formal recognition. The Reserve Bank of India (RBI) has consistently voiced concerns about risks like money laundering and terror financing, advocating for its central bank digital currency (CBDC) as a safer alternative. A recent report by the Esya Centre think tank estimates that nearly 90% of Indian crypto trading has moved offshore due to these policies, stifling innovation and driving users to unregulated platforms.
Globally, the regulatory landscape is evolving rapidly. In the U.S., President Donald Trump’s administration has adopted a pro-crypto stance, including pardoning digital asset leaders and backing stablecoin legislation. Meanwhile, the European Union is already implementing its comprehensive MiCA regulation.
A senior Indian official noted that the country’s crypto decisions would prioritize national interest, avoiding “knee-jerk” reactions. The industry now waits with bated breath, anticipating concrete action from India.
