India considers crypto policy shift amid global trends

The Indian government is reportedly reconsidering its stance on cryptocurrency regulation as global adoption of digital assets continues to grow.

Ajay Seth, India’s economic affairs secretary, acknowledged the borderless nature of digital currencies, stating that India must adapt to avoid being left behind in the evolving financial landscape.

This comes as the government recently imposed a steep tax of up to 70% on undisclosed crypto gains under the Income Tax Act.

Currently, India enforces a 30% capital gains tax on all digital assets, with no distinction between long-term investments and short-term trades.

Amit Kumar Gupta, a legal expert at the Supreme Court of India, criticised these measures as overly harsh and aimed at discouraging blockchain development.

Gupta noted that the government views cryptocurrencies negatively, associating them with activities like money laundering and terror financing.

“Their stance is that we are not going to use or allow anyone to use cryptocurrency because this technology is only for money laundering and terror funding,” he stated.

Despite its strict approach toward cryptocurrencies, India has been actively exploring central bank digital currencies (CBDCs).

Former Reserve Bank of India (RBI) governor Shaktikanta Das described CBDCs as “the future of currency” during his farewell speech in December 2024.

The RBI has also announced plans to expand its cross-border payment platform using wholesale CBDCs as a settlement mechanism.

India’s potential policy shift reflects a broader trend among nations adopting digital currencies to remain competitive globally.

Analysts suggest that international developments, such as regulatory changes in the United States, could influence India’s decision-making process.