India's financial regulators are reportedly reviewing offshore cryptocurrency payment cards that enable residents to spend digital assets in rupees, with the Reserve Bank of India (RBI) and Financial Intelligence Unit-India (FIU-IND) examining services including RedotPay over potential regulatory violations.

The review follows reports from several Indian users of unexpected card deactivations and difficulties accessing offshore payment platforms. Authorities are reportedly assessing whether these services bypass domestic payment regulations, foreign exchange controls, and anti-money laundering requirements. Regulators have not publicly confirmed any nationwide prohibition targeting RedotPay or similar providers, and the reasons behind individual card disruptions remain unconfirmed.

How Offshore Crypto Cards Work

Offshore crypto cards allow users to fund digital wallets with cryptocurrencies, including dollar-backed stablecoins, and make everyday purchases through traditional payment networks. Providers such as RedotPay offer cards that operate through Visa and Mastercard infrastructure.

When customers make purchases, the service converts their cryptocurrency holdings into fiat currency, allowing merchants to receive payments in rupees. As a result, transactions can resemble ordinary debit card payments despite originating from offshore cryptocurrency wallets.

Regulatory concerns extend to India's Foreign Exchange Management Act (FEMA) and rules governing prepaid payment instruments. Financial authorities are reportedly examining whether these arrangements allow cross-border transactions to occur without sufficient domestic oversight. That chain of steps — conversion, network routing, and merchant settlement in rupees — is central to the review, since it can place spending activity outside the checkpoints applied to domestically issued payment instruments.

Card Deactivations and Earlier Findings

Several Indian cryptocurrency users have reported that their offshore payment cards stopped functioning in recent days. Some customers also experienced difficulties accessing service providers' websites, raising concerns about the availability of crypto-funded payment services.

The scrutiny follows findings from Bengaluru-based Digital South Trust, which tested a Visa-backed RedotPay card for domestic online purchases in August. The organization subsequently shared its findings with Indian authorities, highlighting potential gaps in transaction monitoring and customer verification.

India Tightens Oversight of Crypto Payments

India has already increased regulatory pressure on offshore cryptocurrency businesses operating within its market. In September 2026, FIU-IND issued noncompliance notices to 15 virtual digital asset service providers under the country's anti-money laundering framework. Virtual digital asset service providers have been required to register with FIU-IND since March 2023, when the government brought these businesses within the scope of the Prevention of Money Laundering Act (PMLA).

The latest scrutiny highlights growing regulatory concerns as stablecoin payment products connect cryptocurrency wallets with traditional financial infrastructure. Such services offer convenient spending options but raise questions about transparency, taxation, and cross-border fund transfers. Scale raises the stakes: India has topped Chainalysis' Global Crypto Adoption Index in recent years, meaning decisions about offshore card services affect a broad base of digital asset users.

For Indian users, uncertainty surrounding offshore crypto cards could affect access to digital asset balances and everyday payment services. Signals to watch include any public statements from the RBI or FIU-IND, service status updates from card providers, and whether further deactivation reports emerge. The outcome will depend on regulatory findings and whether providers can demonstrate compliance with India's financial regulations.