Offshore crypto cards that let Indian residents spend stablecoins and other crypto assets like ordinary debit cards have come under scrutiny from the Reserve Bank of India (RBI) and the Financial Intelligence Unit-India (FIU-IND), The Economic Times reported on 2 November 2026. Several users say their cards stopped working in India from 29 October.
How offshore crypto cards work in India
The cards are prepaid products issued by overseas fintech providers such as RedotPay and run on global card networks including Visa and Mastercard. A user parks crypto, typically dollar-backed stablecoins, in a designated wallet; at checkout the balance is converted into rupees and the Indian merchant is paid as if it were a normal bank debit card.
According to the report, the cards cost about $40 to $50, carry three-year validity and high daily limits, and have been used for online shopping, mobile recharges, flight bookings and even cash withdrawals at ATMs of large Indian banks. Some programmes advertise limited or no KYC checks, which is what worries regulators.
Why the RBI and FIU-IND are looking at crypto cards
Two people quoted by ET said the RBI and FIU-IND, the agency that tracks suspicious transactions, are examining the cards and are in touch with Visa and Mastercard. None of the three responded to ET’s queries, so there is no official confirmation yet. The scrutiny follows earlier action in which the RBI and FIU-IND joined forces to tackle money laundering.
The alert appears to have come partly from Digital South Trust, a Bengaluru-based non-profit blockchain research group. It obtained a virtual Visa-backed RedotPay card in August, made several domestic online purchases with it, and shared the findings with authorities. Its founder, Sudhakar Lakshmanaraja, told ET that routine Visa or Mastercard payments in India can now be funded by crypto or stablecoins through offshore card programmes.
The legal questions: FEMA, PPI and payment rules
Lawyers quoted in the report said the cards may breach several Indian rules at once:
- Holding crypto with a foreign custodian and converting it to pay Indian or overseas merchants may violate the Foreign Exchange Management Act (FEMA).
- The cards sit outside India’s prepaid payment instrument (PPI) framework and the Payment and Settlement Systems Act, according to Harshal Bhuta of Ascentium India.
- Investigators can still trace token flows with chain-analysis tools, Manavendra Mishra of Khaitan & Co said, so users are not as anonymous as they may assume.
The issue lands as the industry tries to set its own guardrails; the Bharat Web3 Association launched a self-regulatory body for crypto only last week.
Why it matters for India’s payments ecosystem
Stablecoin-funded card spending is growing quickly on traditional networks. Vedang Ratan Vatsa, founder of Hashtag Web3, pointed to Visa’s own disclosure of more than 150% growth in volume across 5 million cards and a stablecoin settlement run rate above $25 billion. For Indian regulators, the concern is that such spending looks like an ordinary card payment while bypassing the KYC, monitoring and tax trails that apply to bank and PPI accounts.
The episode also adds to a busy period for crypto risk in India, from CoinDCX’s 15.99 million USDT wallet loss to the wider debate on cross-border payments as the next fintech battleground.
Key takeaways
- The RBI and FIU-IND are reportedly examining offshore, Visa- and Mastercard-backed crypto cards used for everyday payments in India.
- Users reported card deactivations in India from 29 October 2026; regulators and the networks have not commented.
- Experts say the cards may breach FEMA and sit outside India’s PPI and payment-system rules.
FAQ
Are crypto cards legal in India?
Crypto cards are not authorised payment instruments in India. Experts quoted by ET say using them may breach FEMA and the PPI and payment-system rules.
Why did some crypto cards stop working in India?
Users began reporting deactivations from 29 October 2026. Sources told ET the card networks may have started blocking Indian transactions, but no official reason has been given.
Source: The Economic Times, 2 November 2026; Financial Intelligence Unit-India.
Featured image: Reserve Bank of India building, Kolkata. Photo: Kolkatan / Wikimedia Commons (CC BY-SA 3.0).
