It is worth remembering that Trump’s first presidency was far from crypto-friendly. His administration was sceptical about digital assets, citing financial instability, fraud risks, and national security concerns. But this time, Trump isn’t just a president. He is also one of the largest private crypto investors. That changes everything. The self-styled “crypto president” is now shaping policies for an industry where his own businesses are expanding. If that is not a textbook conflict of interest, what is?
His family’s crypto empire is vast. Memecoins, NFTs, a DeFi app, and a newly launched investment platform, Truth.Fi, which claims to manage crypto portfolios in partnership with Charles Schwab. And then there’s his trump card—a token where his companies collectively own 80%, with a paper value exceeding $14 billion. This is a sitting US president, overseeing policies that directly impact his personal wealth. If Trump and Sacks create a regulatory environment that legitimises these assets, who stands to benefit the most? Hint: Not the Indian investor.All of this makes the upcoming White House Crypto Conference look more like a personal finance strategy meeting than a global policy discussion. And yet, in India, some crypto fans are ecstatic, hoping that Trump’s policies will nudge the Reserve Bank of India (RBI) towards a softer stance. They should not hold their breath.
India’s RBI has always taken a cautious and measured approach to crypto, and for good reason. It has consistently warned about the systemic risks, including financial instability, monetary policy disruption, unchecked capital flight, and the difficulty in regulating decentralised transactions. Crypto is, by design, opaque. You might buy it through official banking channels, but once it’s inside a digital wallet, tracking it is like searching for a missing sock in a washing machine—good luck with that.
And here’s the real problem—crypto is also a national security threat.
Terror financing is already a major global concern, and agencies like the Financial Action Task Force (FATF) have repeatedly warned that terrorist organisations exploit crypto to bypass traditional financial tracking. Given India’s history with terror financing threats, the last thing we need is an untraceable, unregulated financial channel. But that’s exactly what crypto offers. Enforcement agencies worldwide struggle to track money laundering through crypto wallets. And for those who think hawala networks are outdated, crypto has created Hawala 2.0—instant, borderless, and completely anonymous.
Then there’s capital flight. The RBI tightly regulates how much money Indians can send abroad under the Liberalised Remittance Scheme (LRS), but crypto doesn’t play by these rules. High-net-worth individuals and businesses can move money out of India without RBI oversight, weakening India’s control over its own economy. If people start parking wealth in crypto instead of rupees, the rupee will face depreciation pressures, which could trigger inflation and economic instability. And let’s not forget the corporate risks—if Indian businesses start holding reserves in crypto and the market crashes (think Terra-Luna), the shock could ripple through the entire economy.And who benefits from India softening its crypto stance? Not India. The US does. If India liberalises crypto under global pressure, it risks aligning its financial system with American-controlled exchanges, platforms, and policies. The US already dominates global finance—why hand them more control over our digital economy? Global crypto players seek out the weakest regulatory jurisdictions. If India becomes lax, it could turn into a dumping ground for high-risk crypto assets that American and European regulators don’t want in their backyard. Meanwhile, Trump’s crypto diplomacy is taking shape. The White House Crypto Summit is a clear signal that the US wants to push for global crypto adoption—not out of generosity, but to cement its own financial leverage.
Even national cybersecurity is at stake. State-backed cybercrime is thriving, with countries like North Korea funding their weapons programs through crypto hacks. Indian businesses and consumers are already targets of global crypto scams. Ransomware attacks demand crypto payments, making fund recovery nearly impossible. With every digital wallet India opens to international crypto transactions, it risks exposure to a whole new breed of cyber threats.
So, what’s the right policy response? First, strict oversight and enforcement. India must increase scrutiny on crypto exchanges, offshore wallets, and foreign transactions. Second, prioritise the Digital Rupee (CBDC). The Digital Rupee ensures financial control, security, and transparency—everything crypto lacks. Third, global coordination. India should push for global crypto regulations instead of blindly following America into uncharted financial chaos.
The RBI’s cautious stance has protected India from global financial shocks before—this is no time to waver. If history has taught us anything, it’s that financial bubbles never come with an advance warning. The crypto market is filled with speculation, manipulation, and instability.
Let the White House revel in its crypto carnival, where policy and personal profit blur into one. But India must remain steadfast. A nation of 1.4 billion cannot afford to gamble its financial sovereignty on digital tokens peddled by billionaires with vested interests. The world’s most volatile asset class cannot become the foundation of a stable economy. If America wants to turn its financial system into a high-stakes casino, so be it. India, however, must not play a game where the dice are loaded, the rules are rigged, and the house always wins. The RBI’s caution is its wisdom.
—The author, Dr. Srinath Sridharan ( @ssmumbai), is a Corporate advisor & Independent Director on Corporate Boards. The views expressed are personal.
Read his previous articles here
