India's government is opting against a comprehensive cryptocurrency bill, fearing that full regulation could create systemic financial risks and legitimize speculative digital assets.
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| A look into India's cautious stance on cryptocurrency regulation, contrasting its approach with that of other nations like the U.S. and Japan, and exploring the reasons behind its decision to avoid a full legislative framework. Image: CH |
NEW DELHI, INDIA — September 11, 2025:
In a significant policy decision, India is leaning against introducing a comprehensive bill to regulate cryptocurrencies, choosing instead to maintain a strategy of partial oversight. This cautious approach is driven by concerns that integrating digital assets into the mainstream financial system could pose systemic risks. According to a government document reviewed by Reuters, authorities, including the Reserve Bank of India (RBI), believe that containing the risks of cryptocurrencies through regulation would be exceptionally difficult.
India's position stands in contrast to the evolving regulatory landscape in other major economies. The United States, for example, has passed legislation to allow for wider use of stablecoins—digital currencies backed by traditional assets that are less prone to extreme volatility. This legislative move, along with global market acceptance, has contributed to record-high prices for Bitcoin. Meanwhile, Japan and Australia are actively developing their own regulatory frameworks, though they remain cautious about promoting the sector.
The Indian government document highlights a key policy dilemma. It suggests that regulating cryptocurrencies would grant them "legitimacy," potentially causing the sector to become "systemic." However, the document also acknowledges that an outright ban, while addressing the "alarming" risks of speculative crypto assets, would be ineffective against peer-to-peer transfers and trades on decentralized exchanges. This has led India to adopt a nuanced approach, using limited oversight and taxation to manage the industry without fully embracing or banning it. This strategy reflects a global debate on how to balance the financial risks of cryptocurrencies with their potential for innovation.