India's Cautious Stance on Cryptocurrency Regulation

India is signaling a reluctance to legislate the regulation of cryptocurrencies, opting instead for partial oversight as per a recent government document. The Reserve Bank of India warns that regulating digital currencies presents substantial challenges and could bring systemic risks.

The document highlights global shifts, noting U.S. advancements in legalizing stablecoins, while China remains prohibitive, yet considers controlled use. India previously considered a full ban but now focuses on a cautious approach, awaiting developments in U.S. crypto policy.

Currently, cryptocurrency exchanges operate in India under stringent conditions, including harsh taxes. Indians hold $4.5 billion in crypto investments. Regulatory uncertainty limits systemic risk, but clarity is needed. The document stresses examining stablecoin adoption closely, given their potential impact on India's payment systems.

(With inputs from agencies.)