India Cautious on Full Crypto Rules Amid Risk Fears

India hesitates to adopt full crypto regulations due to financial system risk concerns, says Reuters.

Aurelien Sage September 10, 2025 - 3:30 PM

Regulation

India avoids full crypto framework citing systemic risks
Officials highlight concerns over financial stability
Global coordination seen as necessary before moving forward

India is taking a cautious approach when it comes to regulating cryptocurrencies. According to a recent Reuters report, government officials are resisting a full-fledged crypto regulatory framework due to concerns about systemic risks to the country’s financial system.

Despite growing global adoption, India has maintained a firm stance, emphasizing the need for international cooperation before embracing cryptocurrencies completely. While some countries are racing ahead with legislation to integrate digital assets, India believes premature regulation could lead to unintended consequences for the economy.

A senior official told Reuters, “The risks are far too high without a coordinated global framework. Jumping in without preparation might create cracks in our financial structure.”

Financial Stability Remains Top Priority

India’s central bank, the Reserve Bank of India (RBI), has been one of the most vocal critics of cryptocurrencies. The RBI has repeatedly flagged potential threats digital currencies pose, including money laundering, terror financing, and capital flight.

In response, the Indian government has been treading carefully. Instead of a comprehensive framework, it has opted for tax policies and transaction reporting mechanisms to monitor the space. The country has introduced a 30% tax on crypto profits and a 1% TDS (tax deducted at source) on all transactions, significantly slowing trading activity in the domestic market.

India also played a leading role during its G20 presidency in pushing for global crypto policy frameworks, aligning with institutions like the IMF and FSB to craft common guidelines.

🇮🇳 NEW: India resists full crypto framework over systemic risk concerns, per Reuters. pic.twitter.com/ap9JtVxuzV
— Cointelegraph (@Cointelegraph) September 10, 2025

What’s Next for Crypto in India?

While there’s no outright ban, the absence of a clear regulatory path creates uncertainty for crypto businesses and investors in India. Experts suggest that India is likely to wait until major economies such as the US and EU finalize their policies before moving forward with its own laws.

This wait-and-watch approach allows the country to learn from global developments while minimizing domestic risks. Until then, Indian users and companies will continue to operate in a grey zone, navigating through strict tax measures and regulatory ambiguity.

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