India’s Crypto Policy Delayed Again as RBI Blocks Discussion Paper

India’s cryptocurrency policy discussion paper, which the government has promised multiple times over the past two years, has reportedly been shelved for now. 

According to an exclusive report by Moneycontrol, the Reserve Bank of India’s (RBI) persistent opposition to cryptocurrencies is the main factor behind the delay.

The paper, which was being prepared by a working group led by the Department of Economic Affairs (DEA), was expected to outline potential policy options for regulating crypto assets in India. 

It was supposed to draw from the IMF-FSB synthesis paper, study global regulatory approaches, and seek public feedback before any formal stance was taken. Sources had previously indicated that the paper would focus on stablecoins, their use in remittances, and how different categories of crypto assets could be treated under Indian law.

But the RBI has not moved from its position. The central bank continues to view private cryptocurrencies as a threat to monetary sovereignty, financial stability, and the integrity of India’s payments infrastructure. Its concerns around stablecoins are particularly sharp. 

Most stablecoins in global circulation are pegged to the US dollar, and the RBI fears their widespread adoption could undermine the Unified Payments Interface (UPI), which is the backbone of India’s digital payments ecosystem.

The shelving of the paper means India’s crypto industry will continue to operate in a regulatory vacuum for the foreseeable future. There is no standalone crypto law. No licensing framework. No investor protection mechanism. And no clear classification of whether specific tokens are securities, commodities, or payment instruments. The only thing India has in abundance is compliance infrastructure and tax obligations.

Not the first time: Here is every delay so far

The crypto discussion paper has become something of a running joke in India’s digital asset community, but it is not a funny one. Here is how many times it has been promised and then delayed:

July 2024: Economic Affairs Secretary Ajay Seth said that the discussion paper would be ready “before September.” He said the paper would include suggestions on how to regulate crypto beyond just AML and electronic funds transfer laws. An inter-ministerial group with members from the RBI and SEBI was developing a broader policy. 

Seth was clear about the intent: “The policy stance is how does one consult relevant stakeholders, so it is to come out in the open and say here is a discussion paper these are the issues, and then stakeholders will give their views.”

September 2024: No paper was released. Seth later indicated that the RBI had provided input, but the publication was postponed because multiple nations were re-evaluating their approaches to digital assets, especially stablecoins and international payment systems.

October 2024: CoinDesk reported that the paper had been put on hold “due to other priorities.”

December 2024: The Ministry of Finance told Parliament that there was “no timeline anticipated for introduction of comprehensive regulatory guidelines for VDA industry in India.” That statement came from the government itself and was about as definitive a non-answer as one can get.

May 2025: Fresh reports surfaced that the paper was in its “final drafting stages” and could be released in June 2025. CoinDCX CEO Sumit Gupta publicly welcomed the development, saying it would “finally provide opportunities to Indian crypto investors/industry players/media to provide comments/feedback on the sector.”

June 2025: Top Coin Daily reported that the paper was now expected in July, with stablecoins and remittance use cases as the primary focus. Sources said it was being prepared by the DEA and would take cues from the U.S. stablecoin legislation under the GENIUS Act. At least two to three iterations were expected before any policy took shape. 

But sources also noted a key tension: “There are differences of opinion in the group. The RBI is clear on the risks, while other agencies are more open to exploring segmented regulation.”

September 2025: Reuters reported, citing a government document, that India was actively leaning against introducing comprehensive crypto legislation. The document argued that regulating crypto would grant it “legitimacy” and could cause the sector to become “systemic.” It reflected the stance of the RBI. 

The same document noted that Indian investors held approximately $4.5 billion in digital assets, but said this level of exposure did not yet pose systemic risks.

Now, April 2026: The paper is reportedly shelved again. No timeline. No commitment.

That is at least five public delays or deferrals in under two years. The pattern is not accidental. It reflects a genuine impasse within the Indian government, with the Finance Ministry and SEBI more open to exploring regulation and the RBI firmly resisting any move that could legitimise the sector.

Why the RBI will not budge

The Reserve Bank of India’s opposition to crypto is not new. It is arguably the most consistent policy position the central bank has held over the past decade.

The RBI first warned the public about virtual currencies in December 2013. In April 2018, it went further and issued a circular banning all regulated entities, including banks and payment systems, from providing services to anyone dealing in cryptocurrency. That circular effectively choked the industry, forcing exchanges like Zebpay to shut down or relocate.

In March 2020, the Supreme Court struck down the ban in the landmark IAMAI vs RBI case, ruling it violated Article 19(1)(g) of the Constitution on the grounds of proportionality. But the court also noted that the government was free to pass legislation to prohibit cryptocurrencies if it chose to.

The ruling changed the legal position. It did not change the RBI’s mind.

Former Governor Shaktikanta Das was perhaps the most vocal critic of crypto in Indian policy circles. He called for a complete ban on multiple occasions, compared crypto to gambling, and warned it could create an unregulated parallel monetary system that would undermine banking stability and complicate inflation management during crises.

His successor, Sanjay Malhotra, has maintained the same institutional position, even if his public tone has been less combative. In June 2025, Malhotra said during a post-monetary policy press conference: “There is no new development in so far as crypto is concerned. There is a committee in the government which is looking after this. Of course, as you are aware, we are concerned about crypto because that can hamper financial stability and monetary policy.”

In November 2025, speaking at the Delhi School of Economics, he said: “We have a very cautious approach towards crypto because of various concerns that we have. Of course, the government has to take a final view.”

Deputy Governor T. Rabi Sankar has been more pointed. He has publicly called Bitcoin “purely speculative,” compared it to tulip mania, and warned that stablecoins pose “significant concerns for monetary stability, fiscal policy, banking intermediation and systemic resilience.”

In its December 2025 Financial Stability Report, the RBI went even further, urging countries worldwide to prioritise Central Bank Digital Currencies (CBDCs) over privately issued stablecoins. The report argued that only CBDCs can preserve the “singleness of money” and the integrity of the financial system. 

The RBI has been piloting its own digital rupee since late 2022, though adoption has been limited, with around 7 million retail users as of early 2026, a fraction of what UPI serves daily.

The disconnect between the RBI and the Finance Ministry is real and growing. The Economic Survey 2025-2026 hinted at regulatory backing for stablecoins. SEBI has proposed a multi-regulator approach. But as long as the RBI digs in, the discussion paper and any meaningful regulatory framework will keep gathering dust.

Meanwhile, new compliance rules kick in from today

While the policy paper remains in limbo, the tax and compliance infrastructure around crypto keeps expanding. And today, April 1, 2026, marks another round of tightening.

New penalty provisions under the Union Budget 2026 take effect from today. Reporting entities that fail to file crypto transaction statements under Section 509 of the Income Tax Act will face a penalty of INR 200 per day for as long as the default continues. Incorrect reporting or failure to correct errors after being flagged will attract a flat INR 50,000 penalty.

The Finance Bill, 2025 also expanded the definition of Virtual Digital Assets from today to now include “any crypto-asset being a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions.” This wider definition pulls more assets under the existing tax framework.

These penalties come on top of what is already one of the harshest crypto tax regimes in the world. A flat 30% tax on all VDA gains with no deductions except acquisition cost. A 1% TDS on every transaction. No loss set-offs. No carry-forward. An 18% GST on platform service fees.

The Budget 2026 kept all of this unchanged, disappointing an industry that had lobbied hard for relief. As CoinSwitch’s Ashish Singhal noted: “The current tax framework presents challenges for retail participants by taxing transactions without recognising losses, creating friction rather than fairness.”

Add to this the CBDT’s March 5, 2026 notification that formally reclassified crypto-assets, CBDCs, and electronic money products as financial assets under India’s FATCA/CRS reporting framework. That change was made retroactive to January 1, 2026. Crypto exchanges, wallet providers, and financial institutions are now required to share detailed transaction data not just with Indian tax authorities, but potentially with foreign tax agencies through international information-sharing agreements.

India has also committed to implementing the OECD’s Crypto-Asset Reporting Framework (CARF) by April 2027, joining 67 jurisdictions. When CARF goes live, every exchange and wallet provider serving Indian residents will have to collect and annually report transaction data, wallet addresses, user identities, and fair market valuations, all shared automatically across borders.

The government can track crypto. It can tax crypto. It can penalise non-compliance around crypto. What it still cannot do is tell you what the rules actually are.

The bigger picture: Taxed, tracked, but still not regulated

India’s crypto situation is now a paradox that legal and policy experts have flagged repeatedly.

The country collects taxes on virtual digital assets. Exchanges are classified as reporting entities under the Prevention of Money Laundering Act. The Financial Intelligence Unit has registered 49 platforms as of early 2026 and is actively cracking down on compliance. 

In January 2026, FIU-IND issued updated AML/CFT guidelines introducing mandatory CERT-In cybersecurity audits, tighter Travel Rule norms, enhanced KYC rules including live selfie verification and location tracking during onboarding, and flagged privacy coins, tumblers, and mixers as carrying serious money laundering risks.

The Income Tax Department has identified undisclosed crypto assets worth INR 888.82 crore and sent over 44,000 communications to taxpayers flagged for potential non-disclosure. Total onshore crypto tax collections between 2022 and 2025 amounted to just INR 437.43 crore.

And yet there is no dedicated crypto law. No licensing framework. No investor protection regime. No classification of which tokens are securities and which are commodities. No clarity on custody, governance, or disclosure standards.

A GNLU report launched last month in New Delhi, attended by former Supreme Court judges, called for a comprehensive regulatory framework, arguing that with nearly 12 crore Indians engaging with crypto and a global market exceeding $2.4 trillion, India cannot keep operating without clear rules.

The Supreme Court itself has expressed strong dissatisfaction with the government’s delay. In a hearing last year, the bench warned that the vacuum in legislation has enabled widespread abuse and financial misconduct. It said the lack of oversight had allowed digital currencies to be used in ways similar to “hawala.” 

The court reminded the government that it had already called for a definitive policy direction on digital currencies nearly two years prior.

Even the Delhi High Court stepped in. In January 2025, it sought responses from the RBI, SEBI, and the Ministry of Finance on their views about regulating virtual digital assets. Those responses are still pending.

The rest of the world is not waiting

While India deliberates, other countries are moving.

The European Union is already enforcing MiCA, a comprehensive regulatory framework for crypto assets. The EU also began enforcing its crypto reporting regime under DAC8 from January this year.

The United States signed the GENIUS Act into law last year, introducing America’s first federal framework for dollar-pegged stablecoins, with full reserve backing in liquid assets, monthly audits, and consumer safeguards.

The UK has published draft legislation to bring crypto into its broader financial services regime. Dubai and Singapore have built innovation-friendly frameworks. Even Pakistan recently enacted a full crypto law, establishing a dedicated Virtual Assets Regulatory Authority.

India, the country that ranks first globally in crypto adoption according to findings from Chainalysis, with Bitcoin and stablecoins dominating 70% of transactions, remains one of the only major economies of its size without a dedicated cryptocurrency law.

During its G20 presidency in 2023, India had actually led the push for a coordinated international framework on crypto regulation. The IMF-FSB synthesis paper that came out of that effort laid the groundwork for global standards. India helped write the playbook. It just never followed it at home.

What now

The honest answer is that nothing changes in the short term. The discussion paper is reportedly shelved. The tax regime stays. The compliance net tightens. And the offshore migration of traders, capital, and talent continues.

The OECD’s CARF framework will go live by April 2027, and when it does, Indian tax authorities will start receiving automatic reports on crypto transactions happening overseas. The government’s bet appears to be that once the global reporting net closes, offshore arbitrage will end and traders will return.

But that bet assumes there will be a domestic market worth returning to. If the current trajectory holds, India risks arriving at a fully transparent global reporting system with a domestic ecosystem that has already been gutted.

The TRM Labs Global Crypto Policy Review put it plainly: “Meanwhile, broader regulatory clarity continues to prove elusive, as another year passes without the publication of India’s long awaited crypto policy discussion paper.”

India built UPI from scratch and turned it into a global model for digital payments. It proved that innovation and regulation can coexist. The crypto industry has been asking for the same treatment for years. As of today, it is still waiting.

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