Is crypto legal in India? No Indian law bans you from buying, holding or selling it, but no law regulates it as a financial product either. The Ministry of Finance’s own description, recorded by Parliament’s Standing Committee on Finance in July 2026, is that crypto-assets “are presently unregulated in India, except for the limited purposes of taxation, prevention of money laundering and reporting”. In practice that means registered exchanges and KYC, taxed gains, and no regulator to turn to if something goes wrong.
No ban, and no plan for one yet
The closest India has come to a ban was a banking restriction, not a law on crypto itself. In April 2018 the Reserve Bank of India told the banks and other entities it regulates to stop dealing in virtual currencies or providing services to anyone who did. On 4 March 2020 the Supreme Court set that circular aside in Internet and Mobile Association of India v. Reserve Bank of India. The court accepted that the RBI has wide powers, but held the measure was not proportionate, noting that the RBI’s consistent stand was that it had not banned virtual currencies and that the government had not taken a call despite two draft bills pointing in opposite directions.
The RBI followed up with a circular of 31 May 2021, “Customer Due Diligence for transactions in Virtual Currencies (VC)”. It told banks that references to the 2018 circular were “not in order” because the court had set it aside, and that they may continue normal KYC, anti-money-laundering and PMLA checks, plus FEMA compliance for overseas remittances. In plain terms, a bank can question a transaction, but it cannot cite a ban that no longer exists.
The government has not replaced it with anything. Asked in the Lok Sabha on 2 February 2026 whether any proposal to completely regulate or ban cryptocurrency was under consideration, the Minister of State for Finance replied: “No such proposal is currently under consideration.”
That does not mean the official mood is relaxed. In a Rajya Sabha answer of 28 March 2023, the ministry said the RBI “has recommended that crypto assets should be prohibited”, that an Inter-Ministerial Committee had recommended in its 2019 report that all private cryptocurrencies be prohibited, and that any law to regulate or ban crypto could work only with significant international collaboration.
What the law does cover
Three bodies of law already reach crypto, even without a dedicated statute.
| Area | What applies | What it means for you |
|---|---|---|
| Anti-money laundering | Government notification of 7 March 2023 under the PMLA; FIU-IND guidelines updated 8 January 2026 | Exchanges and wallet providers serving Indian users must register with FIU-IND, verify customers and report suspicious transactions |
| Income tax | Taxation regime for virtual digital assets (VDAs) brought in by the Finance Act, 2022 | Income from transfers is taxed under special rules and reported in Schedule VDA of the return |
| Company accounts | Schedule III to the Companies Act, 2013, amended 24 March 2021 | Companies must disclose crypto holdings in their financial statements |
Sources: Lok Sabha unstarred questions 263 (2 February 2026) and 5805 (30 March 2026); Rajya Sabha unstarred question 3104 (28 March 2023).
The tax side is covered in our explainers on crypto tax in India and Schedule VDA in the ITR. The KYC side, including the selfie, location and penny-drop checks added in January 2026, is in our guide to crypto KYC in India.
Registered is not the same as licensed
The PMLA notification of 7 March 2023 made virtual digital asset service providers “reporting entities” under the Financial Intelligence Unit-India (FIU-IND). A Lok Sabha answer of 30 March 2026 gives the scale: 54 such providers were registered with FIU-IND as on 9 March 2026, and FIU-IND had directed the takedown of the apps and URLs of 53 providers found operating in India without complying with the PMLA, a list that includes several large offshore exchanges.
The same answer explains why FIU-IND does not publish its register. Its mandate is limited to anti-money-laundering compliance, and a public list “may create the impression that registered entities are licensed, approved, or endorsed by the government”, which “could mislead users into assuming regulatory protection or recourse in case of fraud or loss”. The answer also notes that crypto exchanges are not registered as such under the Companies Act.
So registration tells you a platform is inside the money-laundering net and must follow FIU-IND’s rules. It does not tell you that its prices are fair, that your assets are segregated, or that anyone will compensate you if it fails. Our guide to FIU-registered crypto exchanges shows how to check a platform’s registration.
Where policy may go next
The most recent formal signal came from Parliament. In its 36th report on the Securities Markets Code, 2025, presented to the Lok Sabha on 23 July 2026, the Standing Committee on Finance noted that the proposed code leaves out VDAs that do not meet the legal test of a security or derivative. It called that exclusion “a regulatory grey area” that exposes investors to fraud, manipulation and poor grievance redressal.
The committee recommended that the government “comprehensively examine the need for an appropriate statutory and regulatory framework” for VDAs and, until then, consider an interim mechanism through recognised self-regulatory organisations under a designated regulator. The ministry’s response in the same report was that including VDAs in the securities code would need broader policy consideration and wider consultation, so it may not be appropriate “at this stage”.
A committee recommendation is not law. Until the government acts on it, the position remains the one set out above.
What this means in practice
Nothing in Indian law stops you from owning crypto or trading it through a platform that follows the PMLA rules. What you do not get is the protection that comes with a regulated product. FIU-IND itself warns against assuming regulatory protection or recourse, and Parliament’s finance committee pointed to inadequate grievance redressal as one of the risks of the current gap. The digital rupee is different, because it is issued by the RBI itself; our digital rupee explainer covers how that works.
This article explains the legal position and is not investment advice.
Sources
Supreme Court of India, Internet and Mobile Association of India v. Reserve Bank of India, Writ Petition (Civil) No. 528 of 2018, judgment of 4 March 2020, [2020] 2 S.C.R. 297 (Digital Supreme Court Reports). RBI circular “Customer Due Diligence for transactions in Virtual Currencies (VC)”, 31 May 2021 (cited by name; the RBI’s website terms do not permit deep links). Lok Sabha unstarred questions 263 (2 February 2026) and 5805 (30 March 2026), and Rajya Sabha unstarred question 3104 (28 March 2023), Ministry of Finance answers on sansad.in. Standing Committee on Finance, 36th report (Eighteenth Lok Sabha) on the Securities Markets Code, 2025, presented 23 July 2026 (copy hosted by PRS Legislative Research). Documents consulted on 13 October 2026.
