Documents reveal a preference among key Indian government departments to tighten control over virtual digital assets, even as the government has yet to adopt a policy of banning or regulating the sector.
Since 2018, when a court overturned the Reserve Bank of India's (RBI) policy that effectively banned cryptocurrencies, India has allowed them to exist in a 'grey zone.'
In 2021, a bill to ban private cryptocurrencies was never introduced in parliament, and discussions on the matter have been repeatedly postponed. The government has delayed implementing an official policy on virtual assets, stating that any plan must balance innovation with risk management while protecting monetary sovereignty, financial stability, and preventing consumer losses.
In September, during internal discussions, India's finance ministry, after consulting with the RBI, supported limited regulatory clarity for virtual assets, arguing that existing tax and other laws have helped contain risks associated with this asset class, Reuters reported.
The latest documents indicate that key authorities are concerned about growing risks to the country's financial stability as cryptocurrency trading continues without clear rules.