In a significant move towards establishing a clear and structured approach to digital assets, the Indian government is set to release a discussion paper on cryptocurrency regulation in June 2025. This announcement marks a notable shift away from the longstanding ambiguity surrounding India’s stance on cryptocurrencies. Industry insiders suggest that global developments, particularly former U.S. President Donald Trump’s open support for cryptocurrencies, may have influenced the Indian government’s evolving position.
A Global Framework with Local Input
The forthcoming paper is expected to be comprehensive and align with global standards, heavily referencing recent reports from the International Monetary Fund (IMF) and the Financial Stability Board (FSB). These international guidelines will help ensure that India’s regulatory approach keeps pace with global best practices and technological trends in the crypto space.
A standout feature of this initiative is the promise of public consultation. The government plans to solicit feedback from a wide range of stakeholders, including financial institutions, legal experts, crypto companies, and the general public. This inclusive approach is viewed as a positive step towards creating balanced, consensus-based regulation.
According to reports, the discussion paper will likely address several key issues: investor protection, anti-money laundering measures, tax implications, and the legal classification of crypto assets. These topics have been central to the regulatory debate in India, especially since the implementation of a 30% capital gains tax and a 1% transaction tax in 2022, which significantly dampened domestic crypto trading activity.
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A Turning Point for India’s Crypto Landscape
The Indian crypto industry has reacted with optimism. For years, uncertain regulations and punitive taxation have driven more than 90% of Indian crypto trading to offshore platforms. With the impending policy paper, many see this as an opportunity for a reset—one that promotes innovation while ensuring responsible oversight. The renewed interest from major players such as Binance and Coinbase, which have re-entered the Indian market after prior exits, further reinforces the belief that the country may be entering a new, more open phase of engagement with cryptocurrencies.
The Indian crypto market is projected to exceed $15 billion by 2035, highlighting its long-term potential. While the Reserve Bank of India (RBI) has traditionally been skeptical about digital currencies, the central bank appears to be adopting a more neutral stance, awaiting clear guidance from the central government.
This post has been authored by Mr. Anirudh Mittal, a law student at the National Forensic Sciences University, currently pursuing B.Sc. LL.B(Hons.).