NEW DELHI — India is stepping back from plans to regulate cryptocurrencies, choosing instead to maintain limited oversight amid fears that formal legislation would grant digital assets unwanted legitimacy and pose systemic risks to its financial system.
A government document reviewed by Reuters shows that the Reserve Bank of India (RBI) believes regulating crypto would be difficult in practice and could accelerate mainstream adoption, increasing exposure to speculative volatility.
Global momentum for crypto has grown, with U.S. President Donald Trump’s administration embracing digital assets and passing legislation enabling broader stablecoin use. Bitcoin prices have surged to record highs this year, intensifying debate over whether India should follow suit.
Other countries remain cautious. China continues to ban crypto while exploring a state-backed digital yuan, and Japan and Australia are drafting regulatory frameworks but without promoting the sector aggressively.
Indian officials argue that while an outright ban would curb speculative risks, it cannot fully stop peer-to-peer trading or decentralized exchange activity. For now, the government appears content to keep crypto on the fringes — neither fully outlawed nor fully embraced.