At the recent Global Fintech Fest 2025 in Mumbai, India made its stance crystal clear: private cryptocurrencies and stablecoins are off the table. The focus has shifted squarely towards government-led digital initiatives like Central Bank Digital Currencies (CBDCs) and regulated tokenisation, as the nation grapples with the challenges posed by non-compliant offshore exchanges and a dynamic global crypto landscape.
India’s Policy Direction at Global Fintech Fest
During the three-day event held from October 7-9, 2025, the exclusion of private cryptocurrencies and stablecoins dominated discussions, emphasizing a strategic pivot towards state-managed digital transformation. The government is championing financial innovation—not on the chaotic terms set by the crypto market, but within a framework of regulatory oversight and national interests. Briefed on state-led digital initiatives, attendees engaged in practical dialogues about AI in finance, advancements in CBDCs, and sustainable finance.
Finance Minister Nirmala Sitharaman highlighted the need for nations to adapt to the evolving financial landscape, stating,
“Nations must prepare to engage with stablecoins,”
underscoring a regulatory dichotomy that recognizes the potential of stablecoin technology while distancing India from the speculative assets of the crypto world. This balancing act suggests the country’s intent to leverage technological advancements in a controlled manner that promotes financial stability.
Crackdown on Offshore Crypto Exchanges
As India moves towards stricter regulations, a significant crackdown has ensued on offshore crypto exchanges. The Financial Intelligence Unit of India (FIU-IND) issued notices to 25 non-compliant platforms, including prominent names like CoinEx and BingX, for failing to adhere to the Prevention of Money Laundering Act (PMLA). As part of this enforcement action, access to these exchanges has been blocked in India.
This decisive measure sends a clear message to the cryptocurrency sector: only exchanges that comply with Indian regulations will be permitted to operate. As Wise Advice aptly noted,
“INDIA ISSUES NOTICES TO 25 OFFSHORE EXCHANGES… India’s stance: no AML…”
This crackdown signifies India’s commitment to enhancing its regulatory framework while fortifying its markets against illicit financial flows.
RBI’s Tokenisation Initiatives
The Reserve Bank of India (RBI) is also taking proactive steps towards embracing technological advancements in finance. Recently, it launched a pilot program aimed at tokenising certificates of deposit using its wholesale CBDC infrastructure. This initiative is anticipated to improve the efficiency and security of financial transactions, presenting an opportunity for banks to innovate within regulatory frameworks.
Suvendu Pati, Chief General Manager at RBI, commented on the initiative, stating,
“From a regulatory standpoint… integrity and enforceability have to be established, and risks are manageable with regulatory guardrails.”
This pilot project not only highlights India’s ambitions in the evolving digital currency space but also its commitment to maintaining financial integrity in the face of rapid technological change.
Global Bank Consortium on Stablecoins
As India focuses on regulation, a consortium of ten major banks, including Bank of America and Deutsche Bank, has unveiled plans to explore the potential of a G7-pegged stablecoin. This project aims to utilize the advantages of blockchain technology while ensuring regulatory compliance and addressing market competition. The consortium stresses that
“a new industry-wide offering could bring the benefits of digital assets,”
showing a rare proactive step among financial institutions in this evolving sector.
The focus on stablecoins represents a wider acceptance of digital asset technology, acknowledging its potential to redefine traditional banking and payment systems while safeguarding against financial instabilities. This initiative reflects a global shift towards recognizing the adaptability of finance amidst emerging trends and technologies.
The Crypto Trading Boom in Non-Metro India
Despite the regulatory clampdown on private cryptocurrencies, a noticeable trading boom is surfacing in India’s smaller cities like Nagpur and Jaipur. Driven by retail investors eager for alternative income sources, particularly amid post-pandemic job market challenges, the market for cryptocurrencies has shown a notable surge. Reports indicate that trading volumes on major exchanges have doubled to $1.9 billion in the last quarter alone.
Ashish Nagose, a flower shop owner from Nagpur, shared his aspirations, saying,
“I want to run my family shop, and hope that trading can provide a steady income,”
embodying the grassroots curiosity and necessity of many Indians seeking crypto trading as a supplement to their earnings. This trend highlights the dichotomy within India: while the government tightly regulates crypto, interest at the grassroots level continues to flourish, driven by a younger, financially savvy demographic.
Stablecoins and Emerging Market Risks
According to Standard Chartered, a looming risk threatens emerging market banks—$1 trillion in deposits could shift to stablecoins over the next few years. This potential capital flight is exacerbated by economic vulnerabilities and currency crises that plague these regions. Such scenarios prompt individuals and businesses to prioritize the safety and stability offered by stablecoins rather than traditional banking solutions.
The report states,
“Return of capital matters more than return on capital,”
reflecting the urgent need for secure investment avenues in high-risk environments like India. As regulatory frameworks evolve, the use of stablecoins may become increasingly entrenched in the financial strategies of individuals and companies alike, making it imperative for regulators to adapt quickly to this changing landscape.
Charting a New Digital Future
India’s journey towards a regulated digital financial ecosystem is becoming increasingly apparent. By consciously steering away from the speculative allure of private cryptocurrencies and focusing instead on state-backed digital initiatives, the country is shaping a unique narrative in the global finance space. With its burgeoning fintech market and a robust regulatory framework, India stands to potentially lead in implementing blockchain technologies responsibly.
As the global narrative around digital assets continues to evolve, India’s strong government involvement can either serve as a blueprint for other nations or become an obstacle that stifles innovation. For now, the focus remains on ensuring that India’s digital future is not only innovative but also safe and sustainable for its burgeoning economy.
