Can Businesses in India Accept Crypto Legally in 2026?

Can a business in India legally accept Bitcoin or Ethereum as payment for goods or services? The short answer is no-not as a payment method. But here’s what most people miss: businesses in India can legally trade, hold, and service cryptocurrency. The rules aren’t about banning crypto-they’re about controlling how it moves through the economy.

Let’s cut through the noise. In 2026, if you run a store in Bangalore or a SaaS company in Hyderabad, you can’t slap a QR code on your counter and say, "Pay in Dogecoin." That’s not allowed. But you can run a crypto exchange, offer investment advice, build blockchain tools, or even mine Bitcoin-all legally, as long as you follow the rules. The Indian government didn’t outlaw crypto. It just made it expensive and complicated to use.

What the Law Actually Says

There’s no law that says "You can’t accept crypto." But there’s also no law that says "Crypto is legal tender." That’s the grey zone. The Supreme Court lifted the RBI’s 2018 banking ban on crypto in 2020, which meant banks could no longer block crypto transactions. But the court also made it clear: the government can still pass a law to ban it anytime. That’s still true today.

Instead of banning, the government chose to regulate through taxation. Since 2022, all cryptocurrency transactions have been classified as Virtual Digital Assets (VDAs) under the Income Tax Act. This means every time someone buys, sells, or trades crypto, the government takes a cut. For businesses, that means:

• 30% flat tax on all crypto gains-with no deductions for losses.
• 1% Tax Deducted at Source (TDS) on every crypto transfer, even if you’re just moving coins between wallets.
• No expense deductions. If you spend $5,000 on mining equipment, you can’t write it off. Only the original purchase price of the crypto counts.

This isn’t a tax on crypto. It’s a tax on movement. The government wants to track every single transaction.

Compliance Isn’t Optional-It’s Mandatory

If your business touches crypto in any way-whether you’re an exchange, a wallet provider, or even a crypto-focused marketing agency-you must register with the Financial Intelligence Unit of India (FIU-IND). This isn’t a suggestion. It’s a legal requirement under the Prevention of Money Laundering Act (PMLA).

Since March 2023, every crypto service provider operating in India, even foreign ones serving Indian customers, must complete full KYC and AML checks. That means collecting government-issued IDs, verifying addresses, and logging every transaction. Binance got fined over ₹18 crore in 2024 for not doing this. Bybit paid ₹9 crore. Both now comply. If you’re not registered, you’re breaking the law.

And it gets stricter. India enforces the FATF Travel Rule with zero tolerance. That means every crypto transfer-no matter how small-must include full sender and receiver details. If you’re a merchant accepting crypto, you need to record not just the amount, but the wallet address of the buyer, their ID, and their location. Most small businesses can’t handle that level of tracking.

Why You Can’t Accept Crypto as Payment

Here’s the key point: the government allows you to own crypto. It allows you to trade it. It even taxes it heavily. But it refuses to let you use it as money.

Why? Because accepting crypto as payment for goods or services creates a loop the government can’t control. If a restaurant takes Bitcoin for pizza, and the customer later sells that Bitcoin for rupees, the government loses visibility into that conversion. It can’t track the capital gain. It can’t collect the 30% tax. It can’t apply the 1% TDS. So to keep control, they blocked it.

Compare this to the U.S. or EU, where businesses can legally accept crypto as payment. In India, the government doesn’t want to be a bystander. It wants to be the gatekeeper. Every time crypto changes hands, it wants to take a piece.

What Businesses Can Legally Do

Just because you can’t accept crypto as payment doesn’t mean you can’t build a business around it. Here’s what’s allowed:

• Operating a crypto exchange (with FIU-IND registration).
• Providing crypto investment advice (as a registered advisor).
• Developing blockchain software or smart contracts.
• Running a crypto education platform or YouTube channel (with proper tax reporting).
• Offering crypto mining services (with full KYC and tax compliance).

Many Indian startups are thriving in these spaces. CoinSwitch Kuber, ZebPay, and Bitbns all operate legally because they follow the rules. They don’t let users pay for services with crypto. They let users buy crypto with rupees-and they report every single transaction.

The Coming Change: COINS Act 2025

There’s a bill in the works called the Comprehensive Regulation of Cryptographic Assets (COINS) Act 2025. If passed, it could change everything. The proposed law would:

• Formally recognize crypto as a legal asset class.
• Create a licensing system for exchanges under RBI oversight.
• Allow clearer tax deductions for trading fees and infrastructure costs.
• Introduce consumer protections against scams and fraud.

It wouldn’t make crypto legal tender. But it might allow businesses to accept it as payment under strict conditions. Think of it like how credit cards were once seen as risky-until clear rules made them mainstream.

Right now, the bill is still under review. No timeline exists. But industry experts say it could pass in 2026 or 2027. If it does, businesses might finally get the green light to accept crypto as payment-provided they meet new compliance standards.

Real-World Challenges

Even if you follow every rule, the real problem isn’t the law-it’s the banks. Many Indian banks still refuse to open accounts for crypto businesses. They’re afraid of being penalized. So even compliant businesses struggle to pay vendors, payroll, or rent in rupees because their bank won’t touch them.

Some startups solve this by using offshore banking or crypto-friendly fintechs. Others rely on cash payments or third-party payment processors. It’s messy. It’s inefficient. But it’s how businesses survive today.

And then there’s the cost. Setting up KYC systems, hiring compliance officers, building transaction monitoring tools, and filing monthly TDS reports adds up. For a small business, this might cost ₹5-10 lakhs per year. That’s not a tax. That’s a compliance tax.

Bottom Line

Can you accept crypto as payment in India? No. Not today. Not under current rules.

Can you build a profitable, legal business around crypto? Absolutely. But only if you treat compliance like a core part of your product-not an afterthought.

The government isn’t trying to kill crypto. It’s trying to control it. And if you’re going to play in this space, you need to play by their rules: register, report, pay, and document everything. The door isn’t closed. It’s just guarded.