There are conflicting views about what the country's law should look like. A total ban is being considered, but it's possible all crypto products could remain legal with regulation.
India's prime minister is preparing to make "a final call" on how to regulate cryptocurrencies — amid ongoing uncertainty for investors.
Possible scenarios include a total ban on private cryptocurrencies, or restrictions targeting a smaller number of digital assets.
And in news that could offer hope to India's crypto community, "all categories of crypto products" could remain legal, albeit with regulation.
The newspaper reports that a "high-level meeting" was held on Thursday to weigh up the pros and cons of each approach.
These deliberations were expected to continue on Friday, with Prime Minister Narendra Modi then deciding how to proceed.
Jail Time on the Cards?
Those suspected of handling crypto could also end up being arrested without a warrant and held without bail, it was reported.
The latest reports to come out of India suggest there is a chance that such severe measures may not be imposed.
Since India's Supreme Court overturned a ban that stopped financial institutions from having business relationships with crypto exchanges in April 2020, demand for digital assets has grown substantially.
Crypto exchanges have also been aggressively advertising their platforms with the help of A-list stars.