Fresh global assessments show rapid progress in crypto regulation but highlight patchy enforcement, rising cross-border risks, and India’s continued absence from the regulatory landscape.

22 November 2025

Global regulators have stepped up their evaluation of crypto markets in recent weeks, releasing new studies that depict a sector moving toward greater oversight yet still marked by uneven implementation and widening vulnerabilities. Fresh reviews by the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) show that while momentum is growing, regulatory consistency remains elusive — with India notably lacking a formal, comprehensive framework.

FSB’s October peer review underscores this disparity. Out of 29 jurisdictions surveyed, only 11 have fully operational crypto-asset regulatory regimes. Stablecoin oversight lags even further: just five jurisdictions have a complete regulatory structure, despite the stablecoin market nearing USD 290 billion and expanding rapidly. India is listed among six jurisdictions — including China and Mexico — that have not developed any formal framework. IOSCO’s thematic review omitted India entirely, a striking omission given that the country hosts the world’s largest retail crypto user base, surpassing 100 million participants.

Countries that have established rules are now advancing into active enforcement. Australia, Singapore, Hong Kong, Bermuda, and Canada have begun taking supervisory action against large global players such as Binance, XT.com, CoinEx, and unlicensed crypto ATM networks. India, however, remains confined to anti–money laundering oversight under the PMLA, with no formal mechanisms for licensing, custody regulation, market surveillance, or consumer safeguards.

This regulatory vacuum has enabled a surge in regulatory arbitrage. As stricter jurisdictions tighten controls, crypto platforms increasingly serve Indian users from offshore locations, sidestepping domestic oversight and creating blind spots for financial authorities. This trend heightens systemic and consumer risks.

Both global bodies spotlight stablecoins as a central pressure point. Their cross-border operational structures — often spanning jurisdictions with differing liquidity and reserve rules — can generate instability during times of stress. IOSCO warns that stablecoin reserve portfolios, heavily invested in short-term Treasuries and money-market funds, strengthen the link between crypto markets and traditional finance, amplifying contagion risks.

International regulatory cooperation also remains far from optimal. Despite widespread signatures on IOSCO’s Multilateral MMoU, information-sharing requests are rare — sometimes limited to just one or two annually. The FSB further notes that the absence of harmonized data on leverage, liquidity, and interconnected exposures hampers coordinated vigilance.

FSB’s progress staging makes these divergences explicit. Jurisdictions such as the EU, Japan, Singapore, Hong Kong, Türkiye, and Indonesia are now in Stage 5, having rolled out complete regulatory frameworks aligned with financial stability objectives. India remains in Stage 1, with no published draft legislation, consultation paper, or implementation roadmap.

The overarching message from these reports is clear: well-defined rules enhance market stability, reduce opacity, and strengthen supervision. In contrast, regulatory ambiguity drives market activity offshore, undermining both consumer protection and systemic oversight.

For India, the policy takeaway is unmistakable. Introducing a phased, coherent, and internationally consistent regulatory structure is not merely an economic imperative but also a stability priority. A clear framework would curb arbitrage, protect users, and enable India to position itself as a credible digital-asset hub while supporting the RBI and government’s financial-stability objectives.