Trump Backs Crypto, Pakistan Embraces It: How Long Must India Wait?
By Apoorva Mittal, ET Bureau | Last Updated: July 13, 2025
As the global landscape of cryptocurrency adoption evolves rapidly, distinct approaches by nations like Pakistan and Bhutan highlight opportunities and challenges, while India remains caught in regulatory limbo. With former US President Donald Trump publicly backing crypto and Pakistan embracing digital assets for strategic gains, questions arise about when India will establish a clear policy on cryptocurrencies.
Pakistan’s Strategic Embrace of Cryptocurrency
In early April 2025, a significant development took place in Islamabad when Changpeng Zhao, founder of Binance—the world’s largest cryptocurrency exchange—became an advisor to the newly formed Pakistan Crypto Council (PCC). The PCC, established just a month prior, aims to provide a regulatory framework for cryptocurrency in a country previously wary of digital currencies.
While officials in Pakistan initially cited foreign investment attraction as a motive, subsequent political and military developments, including Operation Sindoor, revealed a deeper, strategic dimension. Pakistan’s collaboration with World Liberty Financial (WLF), a crypto company linked to the Trump family, marked an effort to secure favor with the US administration. Speculation even arose that a Nobel Peace Prize nomination for Donald Trump may have influenced the US’s subdued response toward Pakistan during recent conflicts.
On July 9, President Asif Ali Zardari signed an ordinance creating the Pakistan Virtual Asset Regulatory Authority (PVARA), empowering it to license and supervise virtual asset entities. This bold move comes at a time when Pakistan’s economy is under severe strain and reliant on bailouts from the International Monetary Fund (IMF). Nevertheless, Pakistan’s proactive stance highlights an emerging belief that cryptocurrency is more than a financial instrument—it is a vital asset in geopolitical and economic strategy.
Bhutan’s Quiet Bitcoin Reserves
Not far from Pakistan, Bhutan has taken a different path, quietly accumulating Bitcoin reserves worth $1.3 billion, a sum nearly equal to 40% of its GDP. Since 2020, Bhutan has exploited its abundant hydropower resources for Bitcoin mining, embedding cryptocurrency into its economic diversification efforts. The Himalayan kingdom integrates crypto into tourism and smart city projects, viewing digital currency as a strategic tool to broaden its economic base, moving beyond reliance on tourism alone.
US Pushes Stablecoin Legitimacy Amid Scrutiny
Meanwhile, the United States is seeking to legitimize stablecoins—cryptocurrencies pegged to stable assets like the dollar—despite facing regulatory challenges and potential conflicts of interest. About 98% of stablecoins are dollar-backed, positioning the US at the center of global crypto regulation debates.
India’s Regulatory Uncertainty and Security Concerns
Against this backdrop, India finds itself at a crossroads. The Supreme Court has repeatedly pressed the government to clarify the legal status of cryptocurrencies, highlighting the risks posed by unregulated trading. In May 2025, during a hearing on an illegal Bitcoin trading case, the court lamented the “parallel under-market” for crypto, emphasizing that regulation could provide essential oversight.
Despite these judicial urgings, India’s approach remains cautious. The Reserve Bank of India (RBI) continues to express concerns about financial stability, fearing cryptocurrencies could undermine monetary control. While the Securities and Exchange Board of India (SEBI) has recommended a multi-regulator oversight framework, concrete policy action is still pending. The government currently imposes a flat 30% tax on crypto capital gains and a 1% Tax Deducted at Source (TDS) on transactions exceeding Rs 10,000, with mandatory registration of crypto exchanges at the Financial Intelligence Unit India (FIU-IND).
Promised policy papers on crypto regulatory frameworks have yet to materialize, increasing uncertainty. This hesitation is notable as the Financial Action Task Force (FATF) reports an overall rise in virtual asset use for terror financing, many linked to India’s adversaries.
India’s FIU has instructed exchanges to monitor transactions from sensitive regions like Jammu and Kashmir, focusing on private wallets and untraceable coins. Experts warn that Pakistan’s fluid crypto stance could facilitate financial flows to terror groups, undermining India’s efforts through FATF and IMF diplomacy.
Expert Perspectives
Anirudh Suri, Managing Director of India Internet Fund, warns that Pakistan’s alignment of crypto policies with the US is more transactional than diplomatic and warns of potential risks for India’s national security. Cybersecurity consultant Subimal Bhattacharjee emphasizes the critical need for a clear and regulated crypto policy in India to prevent misuse by rogue actors.
The Way Forward
The divergent paths of Pakistan and Bhutan underscore cryptocurrency’s growing importance in national economic and geopolitical strategies. As countries worldwide integrate digital assets into their policy frameworks, India faces increased pressure to establish a comprehensive and coherent regulatory regime.
The question looms large: how long will India wait before moving beyond cautious tax-based regulations and judicial prodding to a forward-looking policy that balances innovation with security and financial stability?
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