India is doubling down on its controlled approach to digital assets by tightening oversight and expanding the reach of its central bank digital currency (CBDC).
During the India-Qatar Joint Commission on Economic and Commercial Cooperation, Commerce Minister Piyush Goyal said the government will continue regulating cryptocurrencies through taxation while broadening access to the Reserve Bank of India’s (RBI) digital rupee.
The statement reflects India’s preference for traceable, government-backed digital payments over unregulated crypto speculation.
🚨 BREAKING: 🇮🇳 India Govt does not encourage cryptocurrencies without sovereign or asset backing.
India will introduce an RBI-backed digital currency, similar to US stablecoins, to replace normal currency.
– Commerce Minister Piyush Goyal
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RBI’s digital rupee moves towards wider adoption
Goyal clarified that India does not support unbacked cryptocurrencies due to their high risk and speculative nature.
Instead, it aims to strengthen the RBI-backed digital rupee — launched in pilot form in 2022 — to make it more accessible and widely used across the country.
The RBI’s digital currency currently exists in two versions: a wholesale model for interbank settlements and a retail model for consumers and merchants.
With over five million users by early 2025, the government now plans to extend its use by enabling non-bank payment platforms to distribute e-rupee wallets.
This expansion will make transactions faster and more transparent while reducing reliance on physical currency.
The digital rupee, functioning similarly to stablecoins but backed by sovereign reserves, provides traceability that can help curb financial fraud, hacking, and other cyber risks.
It also aligns with India’s broader sustainability goals by reducing paper consumption linked to cash printing.
India keeps its strict tax regime on crypto assets
While promoting a secure, state-backed alternative, India continues to impose one of the world’s toughest crypto tax regimes. Gains from digital assets face a flat 30% tax, and transactions above ₹10,000 attract a 1% tax deducted at source (TDS).
The structure emphasises oversight and compliance rather than innovation or incentives.
A Mudrex survey of 9,352 participants found that 93% of Indians support regulation for investor protection, yet only 13% approve of heavy taxation.
For 66% of respondents, the high tax rates were cited as the biggest deterrent to investing in cryptocurrencies, seen as restrictive and discouraging participation.
Despite the tax burden, India continues to rank first in the Global Adoption Index 2025, driven by retail enthusiasm, fintech integration, and strong developer activity.
Platforms like Bharat Web3 Association are helping standardise compliance, while the integration of blockchain payments with systems like UPI has made crypto-related transactions more mainstream.
From pilot to platform: India’s digital shift gathers pace
India’s digital rupee has already achieved notable milestones since its pilot launch. By March 2025, circulation reached ₹1,016 crore, and the RBI announced plans to enable cross-border CBDC trials.
Fintech firm Cred recently became the first non-bank company to join the project, distributing e-rupee wallets through YES Bank.
These developments indicate the government’s gradual but consistent movement towards a more digitised financial ecosystem. The focus remains on maintaining state oversight while leveraging blockchain efficiency.
The RBI’s next phase will likely involve expanding the CBDC beyond banks and allowing broader participation from payment companies and fintech startups.
India’s strategy blends innovation with regulation
Goyal’s remarks underline India’s two-track strategy: advancing a sovereign digital currency while ensuring tight regulation of private tokens.
By prioritising traceability, security, and fiscal control, India aims to capture the benefits of digital finance without compromising monetary stability.
The country’s digital policy places financial transparency and national security at the centre of its crypto stance.
As the digital rupee evolves and usage expands, India could emerge as one of the few major economies to balance innovation with regulatory discipline — building a bridge between blockchain technology and state-backed finance.
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