India reportedly examines offshore crypto cards used for rupee payments
India’s Reserve Bank of India (RBI) and Financial Intelligence Unit-India (FIU-IND) are reportedly scrutinizing offshore crypto cards, including RedotPay’s, over questions about payment rules, foreign exchange and anti-money-laundering controls. Neither agency has publicly confirmed a ban or enforcement action against RedotPay.
- Reported scrutiny, not a confirmed joint action: The claim is based on a report citing unnamed sources.
- Users report card disruptions: Some say payments failed, but no official notice has explained the cause or scope.
- Key question: Do specific offshore card arrangements comply with Indian rules?
How crypto-funded card payments work
An offshore crypto card lets customers pay with a conventional card while using cryptocurrency as the funding source. The card program converts digital assets into local currency during processing. The exact conversion and settlement arrangements vary by provider, issuer and network.
RedotPay’s product documentation describes virtual and physical cards that convert cryptocurrency into local currency during payment processing. It lists Bitcoin, Ethereum, USDT and USDC as supported assets. Its physical cards can be used for merchant payments and ATM withdrawals, subject to service availability. The documentation does not establish exactly how every transaction is funded or settled.
RedotPay offers Visa-linked cards, while some other offshore programs use Mastercard-supported arrangements. Indian residents have reportedly used these cards for online shopping, mobile recharges, flight bookings and rupee withdrawals from ATMs. Some prepaid cards reportedly cost between $40 and $50 and remain valid for about three years.
A purchase denominated in rupees does not automatically mean funds crossed a border. But an offshore provider, a foreign-issued card or a cross-border settlement arrangement may raise questions that a merchant’s view of a routine card payment cannot answer.
What is reportedly under scrutiny?
The Economic Times reported that the RBI and FIU-IND were examining offshore prepaid crypto cards, citing two people familiar with the matter. The report describes scrutiny by both agencies, but neither has publicly announced a joint investigation or enforcement action against RedotPay.
The potential legal issues are distinct. The Foreign Exchange Management Act (FEMA) governs aspects of foreign exchange and certain cross-border transactions. Manavendra Mishra, a partner at Khaitan & Co, described the potential exposure as cross-border, not just domestic. That raises a legal question about how a particular arrangement works. It does not prove that every rupee purchase made with a crypto card violates FEMA.
Legal experts also raised questions about prepaid payment instrument rules and payment-settlement frameworks. A prepaid payment instrument is a stored-value payment product. Settlement rules govern how payments are processed and funds are transferred between parties. Harshal Bhuta, co-founder and international tax and FEMA specialist at Ascentium India, questioned how offshore card arrangements fit those frameworks. Those questions do not establish that any specific provider has broken the rules.
Customer identification and transaction monitoring are another concern. Sudhakar Lakshmanaraja, founder of Bengaluru-based blockchain research organization Digital South Trust, said some offshore programs advertise limited verification requirements. That has prompted questions about how financial institutions identify users and monitor transactions.
Digital South Trust said it obtained a virtual Visa-backed RedotPay card in August, completed several domestic online transactions and shared its findings with Indian authorities. The year was not specified. The test shows the card worked for those transactions at that time. It does not establish regulatory approval or a finding of non-compliance.
Card failures have no confirmed explanation
Some users began reporting problems on social media in late October. They said their cards stopped working for payments in India or that they could no longer access related websites. The year and number of affected users were not specified, and the reports remain anecdotal.
People cited by The Economic Times suggested payment networks may have begun restricting transactions involving offshore crypto cards. The publication reported no official notice identifying which companies, if any, imposed restrictions or whether they affect all providers. Visa, Mastercard and the RBI did not respond to the publication’s requests for comment.
According to the report, FIU-IND also issued notices in September to 15 offshore cryptocurrency platforms over alleged failures to meet anti-money-laundering requirements. The year was not specified. The government has said that virtual-asset businesses providing covered services to Indian customers must meet relevant reporting obligations, regardless of where they are based. That position does not establish that RedotPay or any other card provider has failed to comply.
RedotPay’s business context
The regulatory questions come as RedotPay prepares for a potential U.S. initial public offering. The company said it completed a financial audit and a separate assessment of its anti-money-laundering controls in September as part of that preparation. It disputed earlier reports that the proposed listing had been postponed and said it was continuing to work with advisers. The year for those September references was not specified.
RedotPay reportedly had about 8.5 million users by July and was seeking a valuation above $5 billion. The year for the July figure was not stated. These reported business figures do not show that regulators have approved the card service. Nor does the company’s reported audit or AML-controls assessment amount to regulatory clearance.
The report also cited cumulative stablecoin card payments exceeding $10.9 billion by August 2026. Paymentscan figures cited by RedotPay showed more than $1 billion in stablecoin card spending in July, described as the highest monthly figure in that dataset. The year for the July figure was not specified, and the report does not make clear whether either figure measures RedotPay alone or a broader market.
Key questions and answers
-
Have Indian authorities announced a ban on RedotPay?
No. Neither the RBI nor FIU-IND has publicly confirmed a ban or enforcement action against the company.
-
Why are offshore crypto cards drawing scrutiny?
Reported concerns include foreign-exchange and payment rules, customer identification, transaction monitoring and the cross-border structure of some arrangements.
-
Are all offshore crypto cards blocked in India?
That has not been established. Some users have reported failures, but the cause and scope remain unclear.
-
What would clarify the situation?
A formal notice from a regulator, a statement from a payment network or a specific update from a card provider could explain whether restrictions exist and which services they affect.
Crypto cards can make digital assets easier to spend, but familiar card rails do not resolve the legal questions behind a payment. A card working at a merchant shows that a transaction went through. It does not prove the underlying arrangement has clear regulatory approval.
