Crypto regulation in South Asia
As of June 2026 South Asia is one of the most divided regions for crypto. India allows crypto and taxes it heavily, Pakistan has just passed a licensing law, while Bangladesh and Nepal treat crypto trading as prohibited and Sri Lanka remains unclear.
South Asia ranges from a heavily taxed but legal market in India to outright bans in Bangladesh and Nepal, with Pakistan moving to a licensed regime.
Quick answer
As of June 2026 the legal position on crypto in South Asia depends entirely on the country. India allows holding and trading and applies a flat 30% tax plus a 1% tax deducted at source, but still has no single comprehensive crypto law. Pakistan has enacted a Virtual Assets Act that creates a licensing authority, moving away from its earlier restrictive stance. Bangladesh and Nepal treat crypto trading as prohibited through central bank measures, and Sri Lanka has issued warnings without a clear permissive framework. Confirm the exact local position before acting, because the differences across borders are large.
India: legal, heavily taxed, no single law
India allows residents to hold and trade crypto, but does so without a single dedicated regulatory statute. As of June 2026 income from transferring virtual digital assets is taxed at a flat 30% under the Income Tax Act, with a 1% tax deducted at source on transfers above set thresholds and no offset of losses against other income. Exchanges must register with the Financial Intelligence Unit India (FIU IND) and follow anti money laundering rules. The Reserve Bank of India has long voiced concern about crypto, and a broader policy or discussion paper has been expected, so the framework remains a patchwork of tax and anti money laundering measures rather than a comprehensive law. Confirm the current tax position with the Income Tax Department before filing.
Pakistan: a new licensing law
Pakistan moved from a restrictive position toward a licensed regime. The Virtual Assets Act was enacted in 2026, establishing the Pakistan Virtual Assets Regulatory Authority (PVARA) as a permanent body empowered to license and supervise exchanges, custodians, and token issuers, with penalties for operating without authorisation. As of June 2026 this is a recent change, and the licensing process and detailed rules are still being put into practice, so confirm whether a given provider is licensed under PVARA and what the current requirements are before relying on the framework.
Bangladesh and Nepal: trading treated as prohibited
Bangladesh and Nepal sit at the restrictive end of the region. As of June 2026 Bangladesh Bank has treated dealing in cryptocurrency as not permitted, citing foreign exchange and anti money laundering law, and Nepal Rastra Bank has declared crypto transactions illegal, with enforcement action reported against offenders. In both countries the practical position is that crypto trading is prohibited rather than merely unregulated. Because enforcement and policy can shift, confirm the current stance directly with the relevant central bank before assuming anything.
Sri Lanka: warnings and an unclear position
Sri Lanka has not built a clear permissive framework. As of June 2026 the Central Bank of Sri Lanka has issued public warnings that cryptocurrencies are not legal tender and are not regulated, and that the public uses them at their own risk, while the country has explored blockchain and digital finance ideas more broadly. The honest description is that the position is unclear rather than settled either way, so anyone in Sri Lanka should treat the legal status as uncertain and confirm the current guidance from the Central Bank of Sri Lanka.
How the region compares
| Country | Status (as of June 2026) | Lead authority |
|---|---|---|
| India | Legal, taxed at 30% plus 1% TDS, no single law | FIU IND, Income Tax Department, RBI |
| Pakistan | Licensing regime under the Virtual Assets Act | Pakistan Virtual Assets Regulatory Authority |
| Bangladesh | Trading treated as prohibited | Bangladesh Bank |
| Nepal | Trading declared illegal | Nepal Rastra Bank |
| Sri Lanka | Unclear, not legal tender, public warnings | Central Bank of Sri Lanka |
Because positions differ so sharply across South Asia, treat this overview as a starting point and check the specific country before acting.
Regulator and sources
The lead authority for each country appears above. These descriptions draw on official materials from the Income Tax Department and FIU IND in India, the Pakistan Virtual Assets Regulatory Authority, Bangladesh Bank, Nepal Rastra Bank, and the Central Bank of Sri Lanka, reviewed as of June 2026. Where a position is contested or a law is newly passed, such as the Pakistani Virtual Assets Act, we say so rather than overstate certainty.
- Income Tax Department of India, virtual digital asset tax provisions (incometax.gov.in)
- Pakistan Virtual Assets Regulatory Authority, Virtual Assets Act materials
- Bangladesh Bank, public notices on cryptocurrency (bb.org.bd)
- Nepal Rastra Bank, notices on virtual currency (nrb.org.np)
- Central Bank of Sri Lanka, public warnings on virtual currencies (cbsl.gov.lk)
Check which exchanges are available where you live
Availability across South Asia is uneven, and in several countries crypto trading is not permitted at all. Use the country pages to confirm whether any exchange is genuinely available to you before signing up.
Every availability status here is dated and checked against the named regulator's public register. We never place a link to a platform where it is not available.
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Frequently asked questions
Is crypto legal in South Asia?
It depends on the country. As of June 2026 crypto is legal to own and trade in India and Pakistan, though India has no single comprehensive law and Pakistan has only recently passed one. Crypto is banned or heavily restricted in Bangladesh and Nepal, and unclear in Sri Lanka.
How is crypto taxed in India?
India taxes income from transferring virtual digital assets at a flat 30% under the Income Tax Act, plus a 1% tax deducted at source on transfers above set thresholds. This is general information, not tax advice, so confirm the current rules with the Income Tax Department before filing.
Did Pakistan legalise crypto?
Pakistan enacted the Virtual Assets Act in 2026, placing licensing and supervision of virtual asset service providers under the Pakistan Virtual Assets Regulatory Authority. As of June 2026 this moves Pakistan from an earlier restrictive stance toward a licensed regime, so confirm the current licensing position before relying on any provider.
Is crypto banned in Bangladesh and Nepal?
As of June 2026 both Bangladesh and Nepal treat crypto trading as prohibited. Bangladesh Bank and Nepal Rastra Bank have warned that dealing in cryptocurrency is not permitted, so confirm the current position with those central banks before acting.
Is crypto taxed across South Asia?
Tax treatment varies and several countries do not permit crypto at all. This is general information, not tax advice, so confirm the current rules with the relevant national tax authority before filing.