RBI Governor Says Crypto Discussion Paper Will Clarify India’s Stance on Virtual Assets; Industry Reacts

RBI Governor Sanjay Malhotra stated that the upcoming discussion paper on crypto, being developed under the Finance Ministry's oversight, will provide clarity on the future of virtual assets in the country. Speaking to Gadgets 360, members of India's Web3 community highlighted that while other nations are embracing crypto, India's prolonged indecision is hindering its progress in a sector currently valued at $3.23 trillion (roughly Rs. 2,80,42,682 crore).

Here's What the RBI Governor Said

During a media round at a recent event, RBI Governor Sanjay Malhotra was asked about India's stance on cryptocurrencies. Given the RBI's repeated warnings about the risks of crypto and its calls for a ban, he was questioned on whether the central bank still holds an anti-crypto position or if its stance has evolved.

In response, Malhotra stated that it would not be appropriate for him to comment on the matter at this time.

Explaining his response, Malhotra said, “There is already a group that has been constituted with the approval of the government and the finance minister, Nirmala Sitharaman. It is looking into all these issues. Our discussion paper is planned, and let's wait for the discussion paper to be published.”

The RBI chief did not specify a timeline for the release of the discussion paper.

India's central bank has consistently opposed integrating crypto assets into traditional financial systems. The RBI warns that crypto's anonymity in transactions could be misused for illicit activities, potentially threatening national security and financial stability.

In 2024, RBI's former governor Shaktikanta Das had reiterated India's concerns around crypto at the World Economic Forum. In March, FM Sitharaman also said that India's position on crypto is that they cannot be currencies.

Despite India's cautious approach to crypto adoption compared to nations like the US and the UAE, the RBI's 2024 Financial Stability Report acknowledged the global expansion of digital financial systems and highlighted blockchain's significant implications for the financial sector.

Crypto Insiders Share Two Cents

Jagdish Pandya, founder of Web3-focused investment firm Block On Ventures, told Gadgets 360 that India's prolonged indecision on crypto—whether to actively explore and regulate it or remain a spectator to its adoption elsewhere—is delaying progress.

“By the time India decides its stance on crypto, the Web3 industry will have headed towards converging with AI-loaded ‘Agentic web',” Pandya said.

Arjun Vijay, co-founder of Indian crypto exchange Giottus, acknowledged the government's cautious approach but warned that delays could lead to a significant talent drain in the country's Web3 sector.

Speaking on the crypto discussion paper, Vijay said that “as an industry, we have been compliant and have worked with the FIU to map funds and investments in the ecosystem. We expect the discussion paper to address the legality of investments, its protection and surveillance and its taxation. India has a chance to be a front runner in this booming field.”

Meanwhile, other industry voices expressed disappointment over the absence of any mention of crypto in the Finance Minister's recent budget speech.

Details About the Crypto Discussion Paper

In July 2024, Economic Affairs Secretary Ajay Seth had stated that India is developing a discussion paper to guide the future of the country's cryptocurrency sector. The paper will explore regulatory measures, including potential consequences for crypto-related legal violations, while incorporating industry insights to balance sector growth with national and financial security concerns.

No further details on the crypto discussion paper have been disclosed since Seth first mentioned it in July 2024.

However, in February 2025, Seth told Reuters that India is reassessing its stance on cryptocurrency in light of pro-crypto policy announcements by President Trump.

Emphasising that India's approach cannot be unilateral, Seth stated, “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. In that stride, we are having a look at the discussion paper once again.”

As of now, there is no set timeline for releasing the discussion paper. The government has also not finalised a timeframe for introducing comprehensive regulations to govern virtual digital assets (VDAs), Minister of State (MoS) for Finance Pankaj Chaudhary told the Lok Sabha in December 2024.