India is finally planning to put out its much-awaited crypto discussion paper by July. Sources say the focus will likely be on stablecoins, especially how they could help make remittances cheaper and faster. But the paper won’t take a clear position on how the country plans to regulate the wider crypto space just yet.
The paper, being prepared by a working group led by the Department of Economic Affairs (DEA), is expected to include key use cases and take cues from the recent U.S. legislation on stablecoins.
However, it will remain largely neutral, aiming to initiate consultations across ministries, regulators, industry stakeholders, and the public. Multiple sources said this will only be the first version of the paper, and at least two to three iterations are likely before any policy takes shape.
Stablecoins take center stage in India’s cautious crypto approach
Unlike most other cryptos, stablecoins like USDT and USDC are backed by real assets, like cash or gold, which makes them more stable. Together, they’re worth around $240 billion and make up a little over 7% of the entire crypto market, as per CoinCodex.
India seems to be moving in the same direction as global powers. Just a few days ago, the U.S. Senate cleared a bill to regulate dollar-based stablecoins, showing strong support under the Trump administration. India’s upcoming paper might consider treating stablecoins as part of the larger global payments network.
Edul Patel, co-founder and CEO of crypto exchange Mudrex, pointed out that India receives $130 billion in remittances annually, with around $3–5 billion lost in fees and taxes. “With stablecoins, the cost will come down to $0.3-0.5 billion, leading to savings. This is a use case of stablecoins,” Patel told Moneycontrol. He believes this could push India’s remittances to touch $200 billion.
But not everyone’s on the same page. The finance ministry may be pushing things forward, but the Reserve Bank of India isn’t too keen yet. The Reserve Bank of India (RBI) is still worried about crypto, especially stablecoins, mainly because there’s no clear issuer behind them, they could pose risks to consumers, and they might bring in too many foreign-linked currencies.
Meanwhile, the Securities and Exchange Board of India (SEBI) seems more open and is said to support the idea of having different regulators manage different parts of the crypto space.
There are differences of opinion in the group. The RBI is clear on the risks, while other agencies are more open to exploring segmented regulation, said a source aware of the internal discussions.
India’s upcoming paper is being released amid mounting global pressure. Under its G20 presidency in 2023, India endorsed the IMF-FSB roadmap for crypto regulation. The finance ministry also extended anti-money laundering and counter-terror financing norms to crypto platforms last year. These developments have made it harder for the country to delay formal policy direction.
The crypto bill drafted in 2021, which reportedly called for a complete ban on private cryptocurrencies, was never introduced. Meanwhile, crypto adoption in India has surged, especially among younger investors and in tier-2 and tier-3 cities, despite a lack of regulatory clarity.
The Indian crypto market, estimated at $2.5 billion in 2024, is projected to grow to over $15 billion by 2035 at an annual growth rate of 18.5%, according to Grant Thornton Bharat.
Sources confirm that the July paper will only lay out recommendations and is not expected to implement any immediate changes. Instead, it will open the door for wider public and institutional feedback. As one official put it, This is just the start. After this paper, there will be consultations and at least two or three more versions before anything is finalized.
With global policies shifting quickly, India’s crypto future now hinges on how well it balances innovation with regulation. Stablecoins may be the first to get a green signal, but the broader crypto roadmap is still a work in progress.
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