India is resisting a comprehensive cryptocurrency framework, fearing systemic risks

India prefers not to enact comprehensive legislation to regulate cryptocurrencies in the country, opting instead to maintain some regulation over concerns that bringing digital assets into the mainstream financial system could raise systemic risks, according to a government document. The central bank, cited in the document, said it would be difficult to control the risks of cryptocurrencies through regulation in practice. The government document prepared this month noted that regulating cryptocurrencies in India would give them "legitimacy" and "could lead to systemic risks in the sector". By contrast, while a blanket ban would address the "worrying" risks posed by speculative cryptoassets, the document added that such an approach would not address peer-to-peer money transfers or transactions on decentralized exchanges.