Catenaa, Friday, September 12, 2025- India is unlikely to introduce comprehensive legislation regulating cryptocurrencies, Reuters reported, as government officials fear that formal regulation could grant the industry legitimacy and expose the financial system to systemic risks.
A Reuters report said that a government document obtained by Reuters indicated that India would maintain partial oversight of digital assets rather than creating a full legal framework.
The report cited the Reserve Bank of India’s view that regulating cryptocurrencies would be challenging and noted that an outright ban would not fully prevent peer-to-peer transactions or decentralized exchange activity.
India has roughly $4.5 billion in cryptocurrency holdings, the document said, which authorities consider small enough not to threaten financial stability.
Current regulations allow global exchanges to operate if they register locally for anti–money laundering compliance, though high taxes on crypto gains and repeated central bank warnings have kept formal trading limited.
The government previously drafted legislation in 2021 to ban private cryptocurrencies but opted against introducing it.
Plans for a discussion paper in 2024 were deferred to assess regulatory developments in the United States. Meanwhile, other major economies, including the US, UK, EU, Hong Kong, and South Korea, continue to enhance crypto regulatory frameworks.
Officials stressed that the partial regulatory approach has so far contained risks, deterring speculation and fraud while leaving open the possibility of future policy adjustments.
