**Summary:**
In response to Lok Sabha Unstarred Question No. 1153, addressed on July 28, 2025, the Ministry of Finance, Department of Economic Affairs, provided the following information regarding the regulation of cryptocurrency in India.
The government does not collect specific data on crypto assets, as they remain unregulated. However, several measures have been implemented to address concerns related to money laundering and financial transparency. As of March 7, 2023, crypto assets/Virtual Digital Assets (VDAs) fall under the purview of the Prevention of Money Laundering Act, 2002 (PMLA). Income from these assets is taxed under the Income-tax Act, 1961, and aspects of the VDA sector are regulated under the Information Technology Act, 2000. Furthermore, companies are required to disclose their crypto asset holdings in financial statements, as mandated by an amendment to Schedule III of the Companies Act 2013, effective from April 1, 2021 (notification dated March 24, 2021).
Regarding future regulatory frameworks, the government emphasizes the need for international collaboration due to the borderless nature of crypto assets. Effective model guidelines or rules require significant international cooperation on risk and benefit evaluation, along with the development of common taxonomy and standards.
The Reserve Bank of India (RBI) has issued advisories to users, holders, and traders of virtual currencies/crypto assets, highlighting potential economic, financial, operational, legal, and security risks. Through a circular dated May 31, 2021, the RBI has instructed its regulated entities to maintain customer due diligence processes for transactions in VCs, adhering to Know Your Customer (KYC), Anti-Money Laundering (AML), and Combating of Financing of Terrorism (CFT) standards, as well as obligations under the PMLA, 2002. The Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, provided this information.
Key Entities Referenced
Cryptocurrency: A digital or virtual currency that uses cryptography for security.
Prevention of Money Laundering Act, 2002 (PMLA): An Indian law enacted to prevent money laundering and to provide for the confiscation of property derived from, or involved in, money laundering.
Virtual Digital Assets (VDAs): Assets defined as virtual digital assets that are brought under the purview of the Prevention of Money Laundering Act, 2002 (PMLA).
Incometax Act, 1961: The law governing income tax in India.
Information Technology Act, 2000: An Act of the Parliament of India to provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as 'electronic commerce' which involve the use of alternatives to paper-based methods of communication and storage of information.
Companies Act 2013: An Act of the Parliament of India on Indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.
Reserve Bank of India (RBI): India's central bank, which has issued advisories regarding the risks associated with virtual currencies and crypto assets.
Know Your Customer (KYC): Customer due diligence processes for transactions in Virtual Currencies (VCs), in line with regulations governing standards for Know Your Customer.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 1153
TO BE ANSWERED ON MONDAY, JULY 28, 2025/ SRAVANA 6, 1947 (SAKA)
Regulation of Cryptocurrency
1153. Shri Putta Mahesh Kumar:
Will the Minister of FINANCE be pleased to state:
(a) whether the government has undertaken any study/survey regarding cryptocurrency usage in
the country during the last five years;
(b) if so, the details regarding the steps undertaken by the Government to recognise and regulate
cryptocurrency in the country;
(c) whether the Government has any plan to introduce any model guidelines/rules for regulation
of cryptocurrency, if so, the details thereof and if not, the reasons therefor; and
(d) whether the Government has taken any steps to raise awareness regarding cryptocurrency,
especially in Rural/Tier-II/Tier-III cities of the country, if so, the details thereof and if not, reasons
therefor?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (b): Crypto Assets are unregulated in India and government does not collect data on these
assets. Notwithstanding this, government vide notification dated 7th March, 2023 has brought
crypto assets/Virtual Digital Assets (VDAs) under the purview of the Prevention of Money
Laundering Act, 2002 (PMLA) to bring the transactions involving VDAs within the ambit of
PMLA. Further, Income from these assets is taxed under the Income-tax Act, 1961 and differentaspects of the VDA sector are regulated under the Information Technology Act, 2000.
Additionally, Companies with exposure to crypto assets are required to disclose their holding of
crypto assets in their financial statements as per the amendment brought in Schedule III to the
Companies Act 2013, vide notification dated 24th March 2021 effective from 1st April 2021.
(c) to (d): Crypto Assets are by definition borderless and require significant international
collaboration to prevent regulatory arbitrage. Therefore, any proposal for bringing model
guidelines/rules can be effective only with significant international collaboration on evaluation of
the risks and benefits and evolution of common taxonomy and standards. The Reserve Bank of
India (RBI) has issued advisories warning users, holders, and traders of virtual currencies or crypto
assets about the potential risks, including economic, financial, operational, legal, and security
concerns. Further, RBI vide its circular dated May 31, 2021 has also advised its regulated entities
to continue to carry out customer due diligence processes for transactions in VCs, in line with
regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering
(AML), Combating of Financing of Terrorism (CFT), obligations under Prevention of Money
Laundering Act (PMLA), 2002, etc.
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