New Delhi । Ahead of the Union Budget 2026–27, the Ministry of Finance (FinMin) has initiated high-level discussions with key financial regulators — the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) — to firm up a comprehensive regulatory framework for crypto exchanges operating in the country, according to official sources.
Sources familiar with the matter said that multiple government agencies have flagged serious enforcement, compliance, and monitoring challenges under the existing framework governing virtual digital assets (VDAs). These concerns have prompted the government to re-examine the regulatory architecture for crypto trading platforms, especially in view of growing retail participation, cross-border fund flows, and potential risks to financial stability.
As part of the preliminary discussions within the Finance Ministry, SEBI is likely to emerge as the primary regulator for crypto exchanges, given its experience in overseeing market intermediaries, exchanges, and investor protection mechanisms. SEBI’s role may include regulation of crypto trading platforms, registration norms, disclosure requirements, market surveillance, and grievance redressal systems.
Meanwhile, the Reserve Bank of India (RBI) is expected to oversee aspects related to foreign direct investment (FDI), cross-border transactions, capital flows, and potential systemic risks arising from crypto-related activities. RBI’s involvement is seen as crucial to ensure that crypto transactions do not pose risks to monetary policy transmission, foreign exchange management, or capital account stability.
An official close to the development said the discussions are still at an early stage, and no final decision has been taken yet. However, there is growing consensus within the government that clear regulatory oversight is essential to address issues such as money laundering, tax evasion, terror financing, consumer protection, and misuse of crypto platforms for illicit activities.
Currently, crypto assets in India are subject to stringent taxation, including a 30% tax on gains and 1% TDS on transactions, and are covered under the Prevention of Money Laundering Act (PMLA). However, the absence of a dedicated regulator for crypto exchanges has led to regulatory gaps and uneven compliance.
Industry experts believe that bringing crypto exchanges under SEBI’s regulatory ambit could provide much-needed clarity and credibility to the sector, while RBI’s oversight on cross-border aspects would help align crypto regulations with India’s broader financial and macroeconomic framework.
The proposed regulatory roadmap is expected to be discussed further in the run-up to Budget 2026–27, with possible announcements or policy signals aimed at balancing innovation in digital assets with strong safeguards for investors and the financial system.
If implemented, the move could mark a significant shift in India’s approach to crypto regulation, transitioning from a primarily tax-and-enforcement-driven model to a structured regulatory framework with defined roles for financial regulators.