Union Minister of Commerce and Industry Piyush Goyal has reaffirmed India’s cautious approach to cryptocurrencies, stating that the country does not encourage digital assets without sovereign or asset backing, as they pose significant risks to investors. Speaking during a bilateral meeting in Doha, Qatar, on October 6, 2025, Goyal highlighted the dangers of cryptocurrencies not supported by the Reserve Bank of India (RBI) or a local currency, noting that heavy taxation is used to discourage their use without an outright ban. For crypto investors, policymakers, and fintech experts searching Piyush Goyal crypto sovereign backing, India cryptocurrency policy 2025, or RBI digital currency announcement, Goyal announced that India will soon introduce a digital currency fully backed by an RBI guarantee, designed to simplify transactions, reduce paper consumption, and enable faster, traceable payments compared to traditional banking systems. This RBI-backed digital rupee, part of the central bank’s ongoing CBDC pilot, contrasts with unbacked cryptocurrencies by offering legitimacy and security, aligning with India’s broader strategy to foster innovation while mitigating risks in the digital asset space.
Goyal’s remarks come amid global crypto volatility and India’s 30% tax on virtual digital assets (VDAs), which has led to $2.36 trillion in APAC transaction volume in 2025, per Chainalysis.
Goyal’s Stance: Heavy Taxes to Discourage Unbacked Crypto
Goyal clarified that while there is no outright prohibition on cryptocurrencies without central government backing, they are subject to heavy taxation to deter adoption due to their inherent risks and lack of accountability. “We don’t encourage it because we don’t want anybody to be stuck at some point with a cryptocurrency that has no backing and nobody at the backend,” he explained.
- Risk Concerns: Unbacked assets could leave investors vulnerable without recourse, similar to past market crashes.
- Tax Framework: 30% capital gains tax and 1% TDS on transactions, imposed since 2022, aim to regulate while discouraging speculation.
- Global Context: India’s position contrasts with the US’s GENIUS Act, which has spurred stablecoin growth to $300 billion.
Goyal emphasized traceability and speed as key advantages of the upcoming digital currency, positioning it as a secure alternative.
| Crypto Type | India’s Policy | Rationale |
|---|---|---|
| Unbacked (e.g., Bitcoin) | Heavy Taxation (30% + 1% TDS) | Risk of No Backing |
| Sovereign-Backed (CBDC) | Encouraged (RBI Digital Rupee) | Traceability & Security |
The RBI-Backed Digital Currency: Faster, Traceable Transactions
India’s digital rupee, already in pilot since 2022, will be fully backed by RBI guarantees, functioning like traditional currency but with blockchain-enabled traceability. Goyal described it as “faster to transact than the banking system,” reducing paper use while maintaining security.
- Key Features: Instant settlements, lower costs, and full audit trails for anti-money laundering.
- Pilot Progress: Rs 1,016 crore in circulation by March 2025; expansion to retail and wholesale segments.
- Timeline: Full rollout expected in 2026, integrating with UPI for seamless digital payments.
This initiative supports India’s digital economy goals, with crypto activity leading in APAC at $2.36 trillion YTD.
Implications: Balancing Innovation and Risk
Goyal’s comments signal continued caution on private crypto while accelerating CBDC adoption:
- Investor Impact: Heavy taxes may drive capital to regulated assets like the digital rupee.
- Fintech Growth: Encourages stablecoin-like innovations with RBI oversight.
- Global Positioning: Aligns India with 130+ nations piloting CBDCs, countering US stablecoin dominance.
Conclusion: India’s Sovereign Path in Digital Finance
Piyush Goyal’s assertion that India discourages crypto without sovereign backing reinforces a risk-averse stance, paving the way for the RBI-guaranteed digital rupee. As the pilot scales, it could redefine transactions. For the crypto ecosystem, it’s a signal—will regulation foster or stifle? The rupees digitize. ET
