The Reserve Bank

bullish

Polymarket

WazirX

<p>Though <a href="https://www.thestreet.com/crypto/markets/china-japan-uae-india-sell-billions-in-u-s-treasuries" rel="noopener noreferrer nofollow">India</a> topped the list of all countries when it comes to crypto adoption as <a href="https://www.chainalysis.com/blog/2025-global-crypto-adoption-index/" rel="noopener noreferrer nofollow">per Chainalysis</a>' 2025 Global Adoption Index, the country's&nbsp;central bank has reiterated its anti-crypto policy.</p>
<p>The Reserve Bank of India (RBI) has doubled down on its long-held crypto policy&nbsp;"leaning towards prohibition" and the country's tax department has sounded alarm on offshore&nbsp;trading, <a href="https://www.reuters.com/world/india/india-central-bank-backs-crypto-ban-tax-department-warns-evasion-risks-documents-2026-07-08/" rel="noopener noreferrer nofollow">Reuters reported</a> on July 8.</p>
<p>The news agency claims it has seen government documents that back the claim.</p>
<p>The documents reveal that the national agencies are&nbsp;concerned about growing risks to India's financial stability due to crypto assets being traded without any clear regulation and&nbsp;prefer tighter curbs on these assets, Reuters said.</p>
<p><strong><a href="https://www.thestreet.com/crypto/markets/american-veterans-to-receive-10000-in-xrp-from-ripple" rel="noopener noreferrer nofollow">Related: American veterans to receive $10,000 in XRP from Ripple</a></strong></p>
<h2 id="rbi-remains-steadfast-in-opposition-to-crypto">RBI remains steadfast in opposition to crypto</h2>
<p>The RBI suggested that central banks should refrain from trading or gaining exposure to crypto assets, including private stablecoins, to contain contagion risks.</p>
<p>Though Indian lenders are free to do so legally, they have avoided crypto exposure following the central bank's repeated alarm bells.</p>
<p>The RBI has never hidden its highly critical stance vis-à-vis cryptocurrencies, and has even <a href="https://www.thehindu.com/news/national/cryptocurrencies-will-boost-illegal-transactions-rbi-to-sc/article24476582.ece" rel="noopener noreferrer nofollow">tried banning them</a> but a court order in 2021 <a href="https://www.thehindu.com/news/national/supreme-court-sets-aside-rbi-ban-on-cryptocurrency-transactions/article61967124.ece" rel="noopener noreferrer nofollow">struck down</a> those policies.</p>
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<h2 id="tax-department-concerned-about-misreporting-offshore-trading">Tax department concerned about misreporting, offshore trading</h2>
<p>Meanwhile, the country's tax department is concerned with the misreporting of crypto holdings in tax filings, as the documents seen by Reuters revealed.</p>
<p>Less than 25% of the&nbsp;645,000 individuals who executed crypto transactions in the financial year ending in March 2023 reported them in their filings, as per the department.</p>
<p>The department also finds it difficult to track profitable owners because it's no easy task to track crypto transactions on overseas exchanges and private wallets.</p>
<h3 id="more-on-india">More on India:</h3>
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 <li><a href="https://www.thestreet.com/crypto/policy/indias-parliament-invites-wazirx-to-major-policy-talks" rel="noopener noreferrer nofollow"><strong>India’s Parliament invites WazirX to major policy talks</strong></a></li>
</ul>
<h2 id="india-s-39-million-crypto-traders-under-stress">India's 39 million crypto traders under stress</h2>
<p>As per the department's&nbsp;estimates, India&nbsp;​has nearly 39 million crypto traders who held about $2.1 billion in digital assets at the end of May 2026.</p>
<p>The Indian government has not implemented a comprehensive regulatory framework for crypto assets but has an <a href="https://www.incometaxindia.gov.in/w/taxation-of-virtual-digital-asset-vda-" rel="noopener noreferrer nofollow">aggressive tax regime</a>: 30% flat tax on gains and 1%&nbsp;tax deducted at source (TDS) on transactions.</p>
<p>The government even <a href="https://www.leaglobal.com/resource/cryptocurrency-regulation-in-india--is-a-total-ban-on-cards-.html" rel="noopener noreferrer nofollow">considered</a> introducing a bill in 2021 to effectively ban all private cryptocurrencies in the country but eventually decided to hold back.</p>
<p>But if the central bank and the tax department influence the government's virtual digital asset policy, Indian crypto users could be in trouble.</p>
<p><strong><a href="https://www.thestreet.com/crypto/markets/wall-streets-bullish-ratings-fail-to-lift-musks-spacex-contract" rel="noopener noreferrer nofollow">Related: Wall Street's bullish ratings fail to lift Musk's SpaceX contract</a></strong></p>

Nearly 40 million investors could face a crypto ban

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