Global crypto regulation accelerates, but gaps persist — India’s silence grows more…
New global assessments show rising regulatory momentum yet uneven enforcement worldwide, exposing mounting risks from regulatory arbitrage — while India remains without a clear, finalized framework.
22 November 2025
Global crypto oversight has entered a decisive phase in recent weeks, with major international standard-setters unveiling assessments that highlight accelerating regulation but widening disparities. New findings from the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) reveal a world that is moving fast toward regulatory structuring, yet struggling with consistency, enforcement, and coordinated supervision. Amid this momentum, India’s absence of a definitive regulatory framework stands out more sharply than ever.
The FSB’s October peer review underscores this fragmentation. Out of 29 jurisdictions surveyed, only 11 have completed full-spectrum frameworks for crypto assets. The situation is even thinner for stablecoins: only five jurisdictions have comprehensive rules in place, despite the sector nearing a $290 billion market cap and growing at an astonishing 75% annual rate. Notably, the FSB lists India among six jurisdictions — alongside China, Kazakhstan, Lebanon, Mexico, and Saudi Arabia — that currently have no crypto regulatory framework at all. IOSCO’s latest thematic review did not include India either, despite the country being home to over 100 million retail crypto users, the largest globally.
In jurisdictions where frameworks exist, implementation varies widely. Countries such as Australia, Bermuda, Hong Kong, Singapore, and Canada have transitioned from policy formation to active enforcement, taking actions against entities like Binance, XT.com, CoinEx, and unauthorized crypto ATMs. India’s enforcement, by contrast, is confined to anti-money laundering requirements under the Prevention of Money Laundering Act, leaving key areas like licensing, custody norms, market surveillance, and investor safeguards without formal oversight.
This regulatory vacuum fuels a surge in arbitrage. As compliance expectations rise in some regions, firms increasingly shift operations to jurisdictions with weaker rules — a trend clearly visible in India. Several offshore platforms continue to serve Indian investors without being domestically supervised, reducing regulatory visibility and heightening financial and operational risks.
Both FSB and IOSCO also identify a shared structural weak point: the cross-border nature of stablecoin ecosystems. When different components of the same stablecoin arrangement operate under divergent reserve, liquidity, or redemption standards, stress events can trigger destabilizing inflows toward the least regulated jurisdiction. IOSCO warns additionally that stablecoin issuers are heavily parking reserves in short-term government securities and money-market funds, deepening the exposure of traditional financial markets to crypto-sector disruptions.
International cooperation remains far from adequate. Although most jurisdictions have signed the IOSCO Multilateral Memorandum of Understanding, practical use of the information-sharing arrangement remains minimal — often limited to a handful of requests annually. The FSB further highlights the lack of consistent global data on leverage, liquidity positions, cross-market linkages, and concentrated exposures, all of which limit the effectiveness of global supervisory efforts.
The FSB’s staging system makes these differences even more apparent. Jurisdictions such as the EU, Singapore, Japan, Indonesia, Hong Kong, Thailand, Nigeria, Türkiye, Bermuda, Chile, and The Bahamas have reached Stage 5 with fully operational frameworks designed to mitigate financial stability risks. India, however, remains at Stage 1 — with no legislative draft, regulatory mandate, or timeline in public view.
The overarching conclusion from both reports is clear: regulatory clarity is not an obstacle to innovation — it is the foundation of safe and sustainable market development. When rules are transparent, activity remains within regulatory purview; when uncertainty prevails, it moves offshore and accumulates risk.
For India, the message is unmistakable. Even a phased approach toward building a comprehensive, internationally aligned framework would enhance investor protection, reduce systemic risks, and help position the country as a dependable digital asset hub. A well-defined regulatory roadmap would not only support market integrity but also reinforce the broader financial stability objectives of the RBI and the Government of India.