After several delays, the much hyped ‘crypto discussion paper’ is going to be released by the Indian government, which is expected to set course the much awaited crypto policy in a country that has for long ignored an otherwise thriving local community. Indian officials say that the government has been “rethinking” its stance on cryptocurrencies and an updated crypto discussion paper is expected anytime soon.
Recently, Ajay Seth, secretary, department of economic affairs, Indian government, addressed the concerns of crypto community in India, claiming that a discussion paper is expected to roll out after “recalibration exercise” that will go on for a couple of months, after which the process of taking feedback from industry stakeholders will initiate.
“A crypto discussion paper was ready but several countries changed their position, we’re now recalibrating it…..we are recalibrating the paper because the focus of that paper is to pose the right questions to the stakeholder so that we get the right answers in terms of appropriate answer to inform our policy making,” said Seth in an interview.
India has not introduced any changes to its tax structure on crypto in their latest budget 2025 as it continues to tax any crypto gains at 30% along with 1% tax deducted at source (TDS). Albeit, the government has introduced a sub clause in their recently amended Finance Bill, that has widened the ambit of virtual digital assets (VDAs) to include “crypto assets”.
In the words of India’s Finance Minister Nirmala Sitharaman, “we (the government) are not against blockchain technology but we want crypto to be transparent (sic).” Despite India not regulating cryptocurrencies, Sitharaman has justified taxing them claiming that taxes have to be paid even on “black money” (undisclosed income).
So what is it about India’s upcoming crypto discussion paper that has re-ignited curiosity in the Indian crypto community, that has for long suffered apathy at the hands of officials. In this article, we will explain the idea behind crypto discussion paper, how many parties are involved in it and why it could serve as a precursor for upcoming crypto policy.
What is India’s Crypto Discussion Paper?
The Indian government currently does not regulate cryptocurrencies and they fall under the category of VDAs and viewed from the perspective of Anti Money Laundering (AML) and Counter Terrorism prisms. The recent amendment to Finance Bill 2025 says that cryptocurrencies will be defined as “crypto-asset being a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions” with effect from April 1, 2026.
In that regard, back in 2024, Indian government had announced release of a crypto discussion paper with the rationale to seek comments from industry stakeholders towards the idea outlined in it. The Indian government intends to take suggestions and then decide their policy stance on crypto.
Why was the Crypto Discussion Paper Delayed?
The Indian government had earlier promised to deliver the discussion paper in 2023 and latest by September 2024 but it has been delayed ever since. According to Ajay Seth, secretary, DEA, the delay has largely been due to change in stance of different countries on crypto ever since the G20 meet that was organized by India in 2023.
Seth claimed in a talk show, until the G20 meet, India had an apprehensive stance against cryptocurrencies especially stablecoins, however, recent events like U.S. President Donald Trump’s endorsement of crypto, has forced them to rethink their stance. The government is now mulling if crypto can be a way forward for cross border payment settlement system.
Who are the parties involved in Crypto Discussion Paper?
According to Indian officials, the crypto discussion paper is being prepared by Finance ministry albeit the department of economic affairs, the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI). Moreover, the government intends to discuss the policy implications with various stakeholders that might involve crypto exchanges and businesses.
Can we expect a Crypto Act in India?
While, it is too early to comment whether a Crypto Act, defining clear regulations and policies on cryptocurrencies, is on the cards, it is evident for sure that India is shifting its stance.
In a parliamentary democracy like India, bills are usually introduced in the lower house (Lok Sabha ) and Upper House (Rajya Sabha) after a policy paper is prepared by bureaucrats working in the concerned department of the related ministry. Therefore, if India intends to bring an all together new act for cryptocurrencies, then we can definitely say that the discussion paper is the first step towards it.
Conclusion
Often accused of viewing cryptocurrencies solely as an outlet for criminal activities, the Indian government stands at a crossroads today. It can either continue to stall the inevitable, collect taxes and ignore the plight of crypto users in India. Else, it can smell the coffee, wake up to reality and realize how far behind India already is, in the global race for crypto dominance.
Also Read: India Defines Crypto, Tax Reporting Mandatory from 2026
