India’s financial regulators are reportedly examining offshore cryptocurrency payment cards that enable residents to spend digital assets in rupees. The scrutiny follows complaints about card deactivations and concerns surrounding foreign exchange compliance, customer verification, and transaction monitoring.
RBI and FIU Review Crypto Payment Cards
The Economic Times reported that the Reserve Bank of India (RBI) and Financial Intelligence Unit-India (FIU-IND) are reviewing overseas prepaid cryptocurrency cards, including those offered by RedotPay.
These cards convert cryptocurrencies such as Bitcoin, Ethereum, USDT, and USDC into local currency during purchases. Users can make online payments, book flights, recharge mobile phones, and withdraw cash through supported ATMs.
Digital South Trust founder Sudhakar Lakshmanaraja said his organization tested a Visa-backed RedotPay virtual card in August and successfully completed domestic transactions.
Indian Users Report Card Deactivations
Several cryptocurrency users reported payment failures and card deactivations beginning in late October. However, neither the RBI nor FIU-IND has officially announced restrictions against RedotPay. The disruptions have raised questions about whether offshore cryptocurrency cards comply with India’s payment regulations.
Legal experts suggest that cryptocurrency-funded payments involving overseas custodians may create complications under the Foreign Exchange Management Act. Manavendra Mishra, partner at Khaitan & Co., described the regulatory exposure as ‘cross-border, not just domestic.’
Stablecoin Card Adoption Continues Growing
Despite regulatory uncertainty, cryptocurrency-linked payment cards are expanding internationally. Industry data shows that cumulative stablecoin card spending exceeded USD 10.9 billion by August 2026, while July transactions surpassed USD 1 billion.
Visa reported more than 160 stablecoin-linked card programs globally, with payment volumes increasing nearly 200% year over year during its fiscal second quarter. Meanwhile, RedotPay reportedly reached approximately 8.5 million users by July. The company is also preparing for a potential US initial public offering, reportedly targeting a valuation exceeding USD 5 billion.
What Happens Next?
Indian regulators are examining whether offshore cryptocurrency payment arrangements satisfy domestic financial compliance requirements. Legal specialists have mentioned that transaction transparency, anti-money laundering safeguards, and overseas asset reporting remain critical concerns.
Although reported card disruptions have created uncertainty, no nationwide prohibition has been officially confirmed. Further regulatory clarification could determine whether international cryptocurrency cards can continue operating within India’s payment ecosystem.
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