India Ditches Cryptocurrency Regulation Plans Amid Investor Risk Concerns

The Indian government has ruled out establishing a regulatory framework for cryptocurrencies, citing concerns that it could create a false sense of security among investors.

The Union finance ministry made this decision after considering the challenges and contradictions inherent in regulating such assets, which enable anonymous transactions outside traditional state-controlled financial systems.

Citing international experiences, the ministry noted that as regulations develop for centralised intermediaries, activities increasingly migrate towards decentralised and non-custodial arrangements, which are outside the purview of regulation.

The government has instead chosen to push forward with its Central Bank Digital Currency (CBDC), also known as the e-Rupee, which it aims to use for delivering welfare benefits. The CBDC would serve as a medium for these transactions.