AsianFin -- India is leaning towards not introducing specific legislation to regulate cryptocurrencies, choosing instead to maintain partial oversight of the sector due to fears that mainstreaming digital assets could raise systemic risks, according to a government document seen by Reuters.

The document cites the Reserve Bank of India’s (RBI) assessment that regulating cryptocurrencies would be difficult in practice and may not effectively contain the risks they pose.

“Regulating cryptocurrencies in India would grant them legitimacy and may cause the sector to become systemic,” the paper, prepared this month, states.

Global sentiment toward cryptocurrencies has shifted since U.S. President Donald Trump took office, with bitcoin prices hitting record highs. Washington has also enacted legislation permitting wider use of stablecoins — cryptocurrencies backed by fiat currencies that are less prone to extreme volatility.

Elsewhere, approaches vary. China maintains a sweeping ban on cryptocurrencies but is reportedly exploring a Yuan-backed stablecoin. Japan and Australia are building regulatory frameworks but remain cautious, neither actively promoting nor prohibiting the industry.