Key Insights
- A review of India’s cryptocurrency regulations has been initiated by the government, as confirmed by Economic Affairs Secretary Ajay Seth, following changes in global attitudes.
- Access to major exchanges, including Binance, was blocked by Indian authorities, though operations were later resumed after penalties were paid and compliance was achieved.
NEW DELHI (MarketsXplora) – India is reconsidering its regulatory approach to cryptocurrencies, a move that could reshape adoption rates in one of the world’s leading crypto markets, according to senior government officials.
Economic Affairs Secretary Ajay Seth told Reuters that evolving global attitudes toward digital assets have prompted India to review its position.
“More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of the usage, their acceptance, where do they see the importance of crypto assets,” Seth said.
The review is expected to further delay a crucial discussion paper outlining India’s regulatory framework, which was initially scheduled for release in September 2024.
India Weighs Crypto Future as Binance, Bybit Face Regulatory Heat
The potential policy shift comes amid a complex regulatory landscape that has already impacted major industry players. In January, cryptocurrency exchange Bybit announced a temporary suspension of its Indian operations, citing “recent developments from Indian regulators and in continuation of previously implemented restrictions.”
That same month, Indian authorities blocked access to nine cryptocurrency exchanges, including market leader Binance, for operating without proper regulatory compliance. However, a study by the ESYA Center think tank found these restrictions had limited impact, noting the URL blockages were “short-lived and contrary to the government’s intention to deter users from the [cryptocurrency] market.”
Binance has since resumed operations in India after paying a $2.25 million penalty in August, highlighting the dynamic nature of the country’s crypto regulatory environment.
Despite maintaining a stringent 30% capital gains tax on cryptocurrency profits, India has emerged as a global leader in crypto adoption. The country topped the 2024 global crypto adoption rankings compiled by blockchain analytics firm Chainalysis, demonstrating robust market participation despite regulatory hurdles.
The government’s ongoing review of its cryptocurrency stance could signal a new chapter in India’s approach to digital assets, potentially influencing adoption rates in a market that has shown remarkable resilience to regulatory challenges.