India Reviews Evolving Crypto Market Activity
India is closely engaging with cryptocurrency exchanges to understand rapidly changing trading patterns and new crypto products , as authorities seek to ensure compliance without introducing a dedicated regulatory law. A senior tax official said New Delhi prefers partial oversight rather than full-fledged crypto legislation , citing concerns over financial stability and systemic risk.
Government Engaging with Crypto Exchanges
According to Ravi Agrawal , Chairman of the Central Board of Direct Taxes , the government is in active discussions with cryptocurrency exchanges to track how transactions are evolving.
He noted that the nature, structure, and frequency of crypto trades are changing continuously , driven by rapid technological innovation. Authorities, therefore, need to study emerging transaction types before taking policy decisions, especially in sensitive areas such as crypto-linked financial products.
Regulatory Status of Crypto in India
India currently does not regulate cryptocurrencies as legal financial assets , but allows their operation under strict compliance conditions. Global and domestic crypto exchanges such as Binance , CoinDCX , Coinbase , and ZebPay operate in India after registering with a government-designated agency under anti-money laundering norms.
India has instead relied on taxation and disclosure requirements as policy tools to discourage speculative trading.
Taxation and Policy Caution
The government has imposed high taxes on crypto gains , reflecting its view that such measures act as a deterrent against excessive speculation. The Reserve Bank of India has also repeatedly warned investors about risks associated with crypto assets, including volatility and potential financial instability.
Mr. Agrawal highlighted that crypto derivatives are currently not taxed , making them an area of concern that requires closer study. He stressed that the government would “tread carefully” before framing any rules related to such instruments.
Global Trends and India’s Position
Globally, acceptance of cryptocurrencies increased after Donald Trump assumed office in January 2025. Prices of major digital assets such as Bitcoin reached record highs in late 2025 before moderating.
Despite global momentum, India remains cautious. According to earlier official assessments, New Delhi is inclined not to mainstream cryptocurrencies through legislation , fearing that formal recognition could elevate systemic risks. Instead, the focus remains on monitoring, taxation, and compliance-based oversight .
Policy Direction Ahead
India’s approach suggests a regulate-through-surveillance model , balancing innovation with financial stability. While blockchain technology continues to evolve, policymakers appear determined to observe market behaviour closely before committing to any binding regulatory framework.
Exam-Focused Key Points
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India does not recognise cryptocurrencies as legal assets
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Crypto exchanges operate after registration with government agencies
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High taxation is used as a deterrent against speculative trading
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Month: Current Affairs - February 06, 2026
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