India, historically resistant to cryptocurrency, is reportedly re-evaluating its regulatory stance as digital asset adoption accelerates worldwide. According to Reuters, Ajay Seth, India’s economic affairs secretary, acknowledged that crypto “doesn’t believe in borders,” hinting that the nation may adjust its policies to stay competitive in the global digital economy.

This potential shift comes on the heels of India’s aggressive taxation policies, including a newly imposed tax of up to 70% on undisclosed crypto gains under the Income Tax Act. Additionally, India currently enforces a 30% capital gains tax on all digital asset transactions, regardless of whether they stem from long-term investment or short-term trading.

Legal experts have criticized the government’s harsh approach, arguing that it discourages innovation in blockchain technology. Amit Kumar Gupta, a Supreme Court legal practitioner, described the policies as draconian, stating that authorities view crypto as “worse than gambling” and associate it with illicit activities like money laundering and terrorism.

Despite its skepticism toward decentralized digital assets, India is actively developing its own central bank digital currency (CBDC). Former Reserve Bank of India (RBI) Governor Shaktikanta Das, a strong advocate of CBDCs, called them "the future of currency" during his December 2024 farewell speech. Under his leadership, the RBI launched a CBDC pilot program and expanded its cross-border payment initiatives, positioning CBDCs as a primary settlement tool for international transactions.

With global powers racing to adopt digital currencies, India faces a crucial decision: embrace crypto innovation or risk falling behind in the financial revolution.