I hope you are all well. Today I got some exciting (or a bit shocking) news that I would like to share with you. As you all know, I always try to keep you upbeat and excited.
India tops the world in crypto adoption, but policy remains split between encouragement of state-backed digital currency and caution toward private, unregulated assets.
India ranks first in the 2025 Global Crypto Adoption Index, with over 100 million users, while policy direction remains under evaluation.
India’s crypto direction still unsettled
October 2025 finds India’s stance on crypto again at an inflection point. Within days, two senior ministers delivered messages that differ in tone and intent.
On Oct. 6, Commerce and Industry Minister Piyush Goyal, speaking in Doha during the India Qatar Joint Commission, said India has “not been encouraging cryptocurrency, which does not have sovereign backing or is backed by assets.”
He added that the government plans a digital currency “backed by a Reserve Bank of India guarantee like currency,” intended to ease transactions, reduce paper use, accelerate payments, and ensure traceability.
Goyal clarified that while no outright ban is in place, unbacked or speculative cryptocurrencies will face heavy taxation. “While there is no ban as such, we are taxing it very heavily. We don’t encourage it because we don’t want anybody to be stuck with a cryptocurrency that has no backing,” he said.
A few days earlier, Finance Minister Nirmala Sitharaman offered a more measured view at the Kautilya Economic Conclave. She noted that “innovations like stablecoins are transforming money and capital flows” and warned that nations must “prepare to engage” with evolving monetary systems or risk being left behind.
Since the introduction of India’s strict crypto tax regime in mid-2022, which includes a 30% capital gains tax, a 1% TDS on most transactions, and very limited loss offsets, formal adoption has slowed.
Yet more than 100 million Indians continue to hold or trade digital assets. That scale is one factor behind India’s top ranking in the 2025 Global Crypto Adoption Index by Chainalysis, placing it ahead of the U.S.
RBI extends CBDC logic to deposits
On Oct. 7, the Reserve Bank of India announced a pilot program to tokenize bank deposits, set to begin on Oct. 8. The initiative will operate within the wholesale segment of the central bank digital currency system and aims to convert traditional bank deposits into digital tokens on a regulated ledger.
Chief General Manager Suvendu Pati confirmed during an event in Mumbai that the pilot would involve a limited number of banks. He also mentioned that tokenization of commercial papers and other money market instruments is being examined alongside this effort.
According to Pati, integrity and enforceability are essential in this model, and the risks involved can be managed through appropriate regulatory measures.
https://x.com/i/status/1976317738932211962
The government’s follow-through on the discussion paper, its legislative direction, enforcement consistency, and outcomes from ongoing pilots will ultimately determine how India positions itself in global digital finance.