India’s financial authorities have begun examining offshore cryptocurrency payment cards that allow residents to spend digital assets in rupees, according to a report by The Economic Times citing people familiar with the matter. The Reserve Bank of India (RBI) and the Financial Intelligence Unit-India (FIU-IND) are believed to be reviewing how products from overseas providers, including RedotPay, interact with India’s domestic payment system and foreign-exchange framework.
Offshore crypto cards work by converting cryptocurrencies such as Bitcoin, Ethereum, USDT and USDC into local currency at the point of sale. The customer pays a domestic merchant through a conventional card network such as Visa or Mastercard, while the underlying value originally comes from digital assets held with a foreign provider. This structure has raised concerns that users may be bypassing Indian payment and foreign-exchange rules, including the Foreign Exchange Management Act (FEMA).
The scrutiny follows information submitted by Bengaluru-based research organization Digital South Trust, whose founder Sudhakar Lakshmanaraja said the group obtained a virtual Visa-backed RedotPay card in August and completed several domestic online transactions. The organization then shared its findings with Indian regulators, citing limited customer verification requirements and questions about transaction monitoring.
In late October, several Indian users began reporting on social media that their prepaid crypto cards had stopped working for domestic payments, while some also lost access to provider websites. Visa, Mastercard and the RBI did not respond to requests for comment, and no formal enforcement action has been announced. Legal experts interviewed by The Economic Times, including Manavendra Mishra of Khaitan & Co and Harshal Bhuta of Ascentium India, noted that customers may not fully understand the cross-border compliance exposure created by such cards.
RedotPay’s product documentation describes virtual and physical cards that support Bitcoin, Ethereum, USDT and USDC for merchant payments and ATM withdrawals. The company has been expanding internationally and is preparing for a potential U.S. initial public offering. By July it reported around 8.5 million users and was reportedly seeking a valuation above $5 billion. The current Indian scrutiny adds regulatory uncertainty even as stablecoin card spending reached record levels, with more than $1 billion in July and cumulative card payments exceeding $10.9 billion by August 2026.
