India Considers Bitcoin for National Reserves Amid Global Trend

India is at a critical juncture regarding the integration of Bitcoin into its national reserves. As global powers increasingly explore the strategic value of Bitcoin, India's unique economic and technological strengths position it well to consider this digital asset as part of its financial strategy. The global push for Bitcoin as a reserve asset has gained momentum, with the US establishing a Strategic Bitcoin Reserve in January 2025. This reserve is funded by Bitcoin confiscated from criminal activities and company bankruptcies, managed by the Department of Justice and the US Marshals Service. The US government now holds nearly 200,000 BTC, with various states like Texas and Arizona allowing their public treasuries to invest in Bitcoin.

Outside the US, El Salvador holds over 6,000 BTC as part of its national reserves, while Bhutan has accumulated more than 12,000 BTC through eco-friendly hydropower mining, representing nearly 40% of its GDP. These actions reflect a growing global view of Bitcoin as “digital gold,” valued for its limited supply, transparency, and ease of transfer. During times of inflation, currency weakening, and geopolitical challenges, Bitcoin’s decentralized and scarce nature is increasingly appealing to governments looking to diversify their reserves. As more countries consider its strategic role, the narrative around Bitcoin is shifting from a speculative investment to a credible tool for economic stability.

Bitcoin is often called “digital gold” because it combines the rarity of precious metals with the advantages of digital technology, making it a store of value. It is not controlled by any government, bank, or company, protecting it from manipulation. With a limited supply of 21 million, Bitcoin creates scarcity and supports its long-term value. Its high liquidity allows it to be traded around the clock on global exchanges, providing instant market access. Every Bitcoin transaction is recorded on a public blockchain, offering a level of transparency that traditional gold markets cannot match. Bitcoin moves at the speed of the internet, functioning in ways gold simply can’t, with no vaults or physical transport required. With its price exceeding $100,000 in value in 2025 and growing acceptance by financial institutions and governments, Bitcoin’s role as a strategic asset in today’s financial system has been solidified.

India’s economic goals include pursuing a $5-trillion economy by 2025-2026, backed by a strong macroeconomic foundation and a sound banking system. The country’s technological strength is showcased by an 87% fintech adoption rate, surpassing the global average, and a robust user base of over 650 million smartphone users. India’s existing digital public infrastructure, including the Aadhaar identity system, Unified Payments Interface (UPI), and e-RUPI, supports real-time, cashless, and identity-verified transactions. This infrastructure could be extended to support Bitcoin integration at scale, potentially positioning India as a global leader in secure, regulated crypto infrastructure. India’s focus on renewable energy, particularly solar and hydro in states such as Gujarat and Himachal Pradesh, supports sustainable Bitcoin mining. These green energy grids enable eco-friendly mining that is aligned with environmental goals, allowing India to pursue Bitcoin accumulation responsibly.

However, India’s current 30% tax on crypto gains, 4% cess, 1% tax deduction at source (TDS), and 18% GST on Bybit highlight an evolving but unfavorable regulatory framework. As a G20 leader and an International Monetary Fund participant, India has a role to play in shaping global policy. With the emergence of Bitcoin as a capital asset, India must craft balanced regulations rather than dismissing it outright. While the regulatory environment isn’t yet conducive to Bitcoin, some recent statements of political leaders demonstrate growing interest in the cryptocurrency. Pradeep Bhandari, the spokesperson for India’s ruling Bharatiya Janata Party (BJP), has proposed a pilot Bitcoin reserve to strategically enhance the nation’s economic resilience. Subramanian Swamy, another prominent BJP leader, has also advocated for India to transition to crypto. India’s Economic Affairs Secretary, Ajay Seth, stated in an interview, “More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of the usage, their acceptance, where do they see the importance of crypto assets. In that stride, we are having a look at the discussion paper once again.”

As Bitcoin gains attention for national reserves globally, India must carefully assess significant risks before adopting it as a strategic asset. Volatility in Bitcoin’s price can introduce potential equity shocks, particularly during global or domestic financial instability. Incorporating Bitcoin into reserves requires robust oversight, with clear regulations vital to maintain public trust, manage risks, and meet international financial standards. Large-scale Bitcoin mining or custody demands reliable energy and advanced cybersecurity. Power outages or weak digital systems could jeopardize operations and reserve security. Comprehensive environmental evaluations are essential to avoid long-term damage to water and forest areas. While the upside is compelling, a Bitcoin reserve strategy in India must be cautious, regulated, and environmentally conscious to succeed.

As India weighs the future of digital currencies, it can draw valuable lessons from Bhutan, El Salvador, and the Bahamas. Bhutan has harnessed its abundant hydroelectric energy to mine Bitcoin sustainably, accumulating reserves that now reportedly exceed $1 billion, a significant percentage of its GDP. For India, Bhutan’s approach highlights the importance of leveraging renewable energy assets to mine Bitcoin with a minimal carbon footprint and using Bitcoin as a sovereign asset for long-term hedging. El Salvador made global headlines by declaring Bitcoin legal tender in 2021, aiming to promote financial inclusion, attract foreign investment, and reduce remittance costs. However, adoption by the public remained low, and technical problems, lack of digital literacy, and price volatility led many to abandon the system. Eventually, under pressure from international institutions and growing economic strain, El Salvador rolled back Bitcoin’s legal tender status in 2025. India must take heed that policy cannot substitute for infrastructure, education, or trust, and making Bitcoin a legal tender without widespread understanding and secure infrastructure risks public confusion, capital flight, and reputational damage. A reserve-based approach, rather than a transactional one, may be far more suitable. The Bahamas, as the first country to launch a retail CBDC, hoped its Sand Dollar would enhance financial inclusion across its many remote islands. But four years after its launch, adoption remains extremely low. Most citizens and businesses continue to rely on traditional payment methods or cash. For India, which is actively piloting its own CBDC, the lesson is clear: Digital currency succeeds only when it offers tangible benefits to users. Security, ease of use, merchant integration, privacy protections, and public trust must be built before scale can follow.

By learning from these global pioneers, India can craft a measured, innovative, and stable approach, embracing digital finance not as a gamble but as a well-governed evolution of its economic architecture.