Overview

• A government document prepared this month and reviewed by Reuters outlines a stance against drafting comprehensive crypto laws in favor of maintaining partial oversight.
• The paper argues a ban cannot stop peer‑to‑peer transfers or decentralized exchange activity, while full regulation could make the sector systemic.
• Officials highlight risks from dollar‑pegged stablecoins following the U.S. GENIUS Act, warning widespread use could fragment payment rails and weaken UPI.
• For now, India allows global exchanges to operate after local registration, imposes punitive taxes, and has seen banking links to crypto trading largely freeze following RBI cautions.
• The document estimates Indian retail crypto holdings at about $4.5 billion and says current use is limited and not a threat to financial stability.