Can NRIs Legally Hold/ Trade Crypto Abroad?

Yes, NRIs can hold/ trade crypto abroad, provided they use foreign funds, bank accounts, and platforms. However, once their residential status from NRI changes to ROR, it triggers the global reporting of the assets. Additionally, unless you have India-sourced income, to skip 30% Tax/ TDS, avoid India routing.

Is Crypto Better Than Traditional NRI Investments?

No, crypto is not better than traditional NRI investments, while most mutual funds/ ELSS provide 12-15% regulated returns, cryptocurrency has high volatility. Additionally, compared to traditional NRI investments, it is suited only to a <5-10% speculative allocation.

Investment & Financial Planning

Advantages and Disadvantages of Cryptocurrency for NRIs

Q: What Are the Main Benefits of Crypto for NRIs?

The main benefits of cryptocurrency include diversification beyond real estate or the stock market, 24*7 borderless trading, potential high returns with 100% + annual possible capital gains, and an inflation hedge (bitcoin as digital gold).

Q: How Does Crypto Help NRIs With Remittances or Diversification?

Cryptocurrency provides fast/ low-cost global transfer. It further bypasses the traditional remittance fees. Additionally, NRIs living in crypto-friendly countries such as Singapore or the UAE can access the platforms that are not available in India.

Q: Why Is Crypto Taxation Harsh for NRIs?

Crypto taxation is harsh for NRIs become India has imposed a flat 30%+ cess (no tax deductions/ loss set-off) on VDA, 1% TDS on transfers. Additionally, NRIs and ROR need to report their holdings in Schedule FA (Foreign Assets) when filing ITR in India or face penalties.

Q: What FEMA/ LRS Risks Do NRIs Face With Crypto?

NRIs dealing with cryptocurrency face potential penalties and regulatory uncertainty under the FEAM because of the conservative stance and lack of clear legal recognition for crypto as a regulated asset class by the RBI. Additionally, LRS is a framework for Indian residents to send up to $250,00 overseas annually for stated purposes. It is not applicable to NRIs.

Q: How Volatile and Risky Is Crypto for NRIs?

Price changes 50-80% yearly, for instance, in 2022, Bitcoin crashed 70%. Additionally, there is no investor protection, have high hacking or scam risks. Also, if holding the currency during INR depreciation, NRIs lose rupee value.

By Ritesh Jain |Last Updated: December 30, 2025

Advantages and Disadvantages of Cryptocurrency for NRIs

A cryptocurrency is a digital or virtual currency. It has already taken the investment world, and for investors, whether Indian or NRI, it has become a trend. Additionally, as we know, cryptocurrencies have the potential to redesign the financial world. However, like any investment, cryptocurrency does have its own pros and cons for investors.

Confused, don't worry. To help you better understand this, in this blog, we have mentioned the advantages and disadvantages of cryptocurrency for NRIs. So read on and gather all the information.

Ritesh Jain(Tax Expert)

Mr. Ritesh has 20 years of experience in taxation, accounting, business planning, organizational structuring, international trade financing, acquisitions, legal and secretarial services, MIS development, and a host of other areas. Mr Jain is a powerhouse of all things taxation.

Frequently Asked Questions

The main benefits of cryptocurrency include diversification beyond real estate or the stock market, 24*7 borderless trading, potential high returns with 100% + annual possible capital gains, and an inflation hedge (bitcoin as digital gold).

Cryptocurrency provides fast/ low-cost global transfer. It further bypasses the traditional remittance fees. Additionally, NRIs living in crypto-friendly countries such as Singapore or the UAE can access the platforms that are not available in India.

Crypto taxation is harsh for NRIs become India has imposed a flat 30%+ cess (no tax deductions/ loss set-off) on VDA, 1% TDS on transfers. Additionally, NRIs and ROR need to report their holdings in Schedule FA (Foreign Assets) when filing ITR in India or face penalties.

NRIs dealing with cryptocurrency face potential penalties and regulatory uncertainty under the FEAM because of the conservative stance and lack of clear legal recognition for crypto as a regulated asset class by the RBI. Additionally, LRS is a framework for Indian residents to send up to $250,00 overseas annually for stated purposes. It is not applicable to NRIs.

Price changes 50-80% yearly, for instance, in 2022, Bitcoin crashed 70%. Additionally, there is no investor protection, have high hacking or scam risks. Also, if holding the currency during INR depreciation, NRIs lose rupee value.