India's crypto policy debate has taken a harder turn after government papers reviewed by Reuters on July 8, 2026 showed the Reserve Bank of India repeating its long-standing preference for containment over a formal regulatory framework. The central bank's position is clear: keep lenders fully insulated from digital assets and prevent crypto tokens from entering the payments system.
Deputy Governor Rohit Jain presented that view to the Parliamentary Standing Committee on Finance on July 2, arguing that banks should remain separate from crypto-related risks. India's tax department added a parallel warning, saying offshore trading is difficult to monitor and could create more room for tax evasion.
Large User Base, Heavy Tax Burden
The policy debate matters because the market is no longer marginal. Around 3.93 crore KYC-verified users reportedly hold digital assets worth about ₹20,436 crore. At the same time, Indian investors face a flat 30% tax on gains and a 1% TDS on every trade, with no loss offset. Even tax-filing discussions have suggested that such a structure may push traders toward offshore platforms that are harder for authorities to track.
The contrast with recent history is striking. India ranked first in Chainalysis's Global Crypto Adoption Index in 2025, but the official mood has since shifted sharply. The RBI has also challenged the methodology behind that ranking. Recent incidents have added to the pressure, including the ₹71.6 lakh fraud complaint involving CoinDCX's co-founders in March 2026; they were later granted bail after a court found no case, while the exchange said impersonators had operated a lookalike website.
India Diverges From EU and US Approaches
Globally, India is moving along a different path from both the European Union and the United States. The EU's MiCA regime is already fully in force, providing a licensing and disclosure framework for crypto firms. The US remains unfinished but has made legislative progress. India, by contrast, has neither imposed a formal ban nor adopted a full rulebook. What has changed is the tone inside key agencies, which now appears far less open than before.
With the global crypto market valued at roughly $2.2 trillion, still below its late-2025 peak, risk appetite remains subdued. A parliamentary panel is due to meet again this month before submitting a report during the monsoon session. That document could become the next major signal on whether India moves closer to stricter exclusion or eventually chooses a more structured regulatory model.