India leaves crypto and stablecoins at the door in fintech jamboree – Reuters

India’s muted stance on cryptocurrencies and stablecoins was evident as these topics were notably absent from discussions during a key fintech event hosted by the government, raising concerns about the country’s regulatory direction and its impact on crypto ventures.

Background

Despite being one of the fastest-growing digital economies, India continues to express regulatory hesitation towards cryptocurrencies and stablecoins. This was apparent at the Global Fintech Fest 2024 in Mumbai, an event that drew fintech leaders, regulators, and developers from around the world. Notably, there was no official discussion or panel dedicated to crypto or stablecoin innovation throughout the multi-day conference.

This deliberate omission contrasts sharply with the growing global focus on digital assets, especially as central banks and private enterprises increasingly explore blockchain-based financial infrastructures.

Market Impact

The lack of engagement on crypto regulation is creating uncertainty for blockchain startups and global crypto firms looking to expand in India. Industry experts argue that India’s ambiguous stance risks discouraging investment and innovation in the rapidly evolving Web3 sector.

While the Reserve Bank of India (RBI) has been vocal about its concerns over private digital currencies, it has actively promoted its own central bank digital currency (CBDC). This selective promotion of digital finance tools highlights a cautious approach toward decentralized technologies.

Industry Reactions

Crypto entrepreneurs have expressed disappointment at the exclusion of cryptocurrencies from the fintech summit’s agenda. Many feel this signals the government’s reluctance to engage with the ecosystem, despite the sector’s global relevance and India’s growing tech talent base.

“Omitting crypto from key policy discussions sends a signal that India is not ready to lead in digital asset innovation,” said one blockchain founder attending the event.

Crypto Market in India: Status Quo

Cryptocurrency trading in India remains in a state of regulatory limbo. While not outright banned, crypto is subject to stiff taxation policies, including a 30% tax on gains and a 1% tax deducted at source, which have significantly reduced trading volumes on domestic platforms.

This uncertain environment has caused some Indian crypto companies to shift operations overseas, seeking more favorable regulatory climates in countries such as the UAE and Singapore.

Outlook

With global interest in digital assets continuing to accelerate, India’s decision to sideline crypto and stablecoins from its flagship fintech dialogue could have long-term implications for its leadership in financial innovation. Without clearer regulatory guidance, the country risks falling behind in an increasingly competitive space.