India Reconsiders Cryptocurrency Regulations Amid Global Policy Shifts

India Reconsiders Cryptocurrency Regulations Amid Global Policy Shifts

India’s government is reassessing its regulatory stance on cryptocurrencies, a move that could significantly influence adoption rates in the country. Despite stringent regulations, India has consistently ranked among the top nations for crypto adoption in recent years.

In an interview with Reuters, Economic Affairs Secretary Ajay Seth confirmed that policymakers are reviewing their approach to crypto in response to evolving global perspectives.

“More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of usage, acceptance, and the importance of crypto assets,” Seth stated.

This reassessment may further delay the long-awaited discussion paper outlining India’s official regulatory position. Initially scheduled for release in September 2024, the paper has already faced multiple delays.

India’s tightening crypto regulations have had a tangible impact on the industry. In January, Bybit temporarily halted its services in the country, citing “recent developments from Indian regulators and previously implemented restrictions.” Around the same time, Indian authorities blocked access to Binance—the world’s largest crypto exchange by volume—along with eight other exchanges for operating without complying with local laws.

However, a report from the ESYA Center, an Indian think tank, suggested that these restrictions had little lasting impact and did not effectively deter users from the crypto market. Binance ultimately re-entered India in August after paying a $2.25 million penalty.

Despite these regulatory hurdles, India remains a global leader in crypto adoption. In 2024, analytics firm Chainalysis ranked India as the world’s top crypto market, even as investors face a steep 30% capital gains tax on cryptocurrency transactions.

As India weighs potential policy shifts, the crypto industry will be closely watching for regulatory developments that could shape the country’s future in the digital asset space.