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The central government has decided not to bring a separate law to regulate cryptocurrency in India. Officials fear that a formal rulebook could make people think crypto is safe or backed by the government, which it is not.
The Finance Ministry shared this view with the Standing Committee on Finance. Instead of new crypto rules, the government wants to push the Reserve Bank of India's digital currency, the e-Rupee. Officials are also looking at using the e-Rupee to send welfare payments to citizens.
The ministry's Economic Affairs Division says crypto is hard to regulate. Many transactions happen through decentralized platforms and wallets that don't need a middleman. If the government tightens rules on regulated crypto exchanges, some trading could simply move to unregulated systems that are even harder to track.
Officials also worry that new rules could give first-time investors false comfort. People might assume that "regulated" means "safe," even though crypto prices can crash without warning. Across the world, rules on crypto still vary widely, and many countries have gaps in their laws too.
So rather than write fresh crypto laws, India will keep using existing rules on money laundering, taxation, consumer rights, and financial stability to watch over the sector. The government also says it will keep tracking how other countries handle crypto.
Also Read: White House Warns Crypto Bill Delays Could Invite Tougher Future Laws
Crypto is still not legal tender in India. But profits from digital assets attract a 30% tax, plus a 4% cess. Losses from one crypto trade cannot be adjusted against gains from another trade.
The Financial Intelligence Unit already tracks crypto companies operating in India. More than 50 platforms, including CoinDCX and Binance, are registered with the authorities.
For now, India is choosing caution over a rulebook. The government would rather manage crypto risks through laws that already exist while quietly building up its own digital currency as the safer alternative.
