Cryptocurrency in India: A Historical Perspective
The popularity of cryptocurrency in India surged following the demonetization of INR 500 and INR 1000 notes in 2016. This move triggered widespread adoption of digital payment systems and sparked increased interest in cryptocurrencies. However, the Reserve Bank of India (RBI) has repeatedly cautioned against their use and advocated for a ban on cryptocurrencies.
India has also topped Chainalysis’ Global Crypto Adoption Index for three years in a row, according to the 2025 edition.
Current Regulatory Landscape in India
India presently lacks specific legislation governing virtual currencies. Nevertheless, the Income Tax Department has amended its laws to enable the taxation of Virtual Digital Assets (VDAs), which encompass cryptocurrencies. The Indian government has also declared that cryptocurrencies are not considered legal tender and has advised citizens against engaging in transactions involving them.
In March 2023, the Indian government extended money laundering laws to encompass cryptocurrencies. Since then, crypto exchanges, custodians and transfer services are reporting entities under the Prevention of Money Laundering Act, and about 49 exchanges had registered with the financial intelligence unit by FY 2024-25.
Enforcement followed. In October 2025, India’s financial intelligence unit (FIU-IND) issued notices to 25 offshore exchanges that were serving Indian users without registering under the anti-money laundering law, and asked internet providers and app stores to block their websites and apps.
Officials do not speak with one voice. RBI Governor Sanjay Malhotra described the central bank’s stance as “” in November 2025 and said the final decision lies with the government. Commerce Minister Piyush Goyal called the government neutral on crypto in October 2025. In July 2026, Reuters-reported internal RBI documents showed the central bank , while the tax department found that fewer than a quarter of those who made crypto transactions in the financial year ending March 2023 had declared them.
