The Reserve Bank of India (RBI) has expressed concerns that regulating cryptocurrencies could inadvertently legitimize the sector and introduce systemic risks. According to a Reuters report, documents viewed by the outlet reveal that the RBI believes regulation would make it difficult to contain the risks associated with digital assets. The central bank suggests that an outright ban might address speculative risks but would not prevent peer-to-peer transactions or decentralized exchange activities. Currently, India lacks comprehensive cryptocurrency regulations but imposes a 30% tax on digital asset gains and requires foreign exchanges to register with local authorities. Despite regulatory challenges, India leads globally in crypto adoption, as highlighted by Chainalysis' 2025 Geography of Crypto Report. However, industry experts note a disparity between adoption metrics and actual usage, indicating a complex regulatory landscape.