India's long-awaited cryptocurrency policy discussion paper has been shelved for the fifth time in under two years, with the Reserve Bank of India's persistent opposition cited as the main obstacle. The paper, originally promised multiple times since 2024, was intended to outline comprehensive regulation using global frameworks but has faced continuous delays due to internal government disagreements.
The delay reflects a genuine impasse within the Indian government, with the Finance Ministry and SEBI showing openness to exploring crypto regulation while the RBI firmly resists any move that could legitimize the sector. The Economic Survey 2025-2026 hinted at regulatory backing for stablecoins, and SEBI has proposed a multi-regulator approach, but RBI's opposition continues to block meaningful progress.
Despite the regulatory uncertainty, the tax and compliance infrastructure around cryptocurrency continues expanding. New penalty provisions under Union Budget 2026 took effect on April 1, 2026, imposing ₹200 per day penalties for entities failing to file crypto transaction statements under Section 509 of the Income Tax Act, with additional ₹50,000 flat penalties for incorrect reporting.
The Finance Bill 2025 also expanded the definition of Virtual Digital Assets, and the CBDT's March 5, 2026 notification reclassified crypto-assets as financial assets under India's FATCA/CRS reporting framework, effective retroactively from January 1, 2026. India has committed to implementing the OECD's Crypto-Asset Reporting Framework (CARF) by April 2027, joining 67 jurisdictions in automatic cross-border crypto data sharing.
