- RBI and FIU-IND are reportedly examining offshore crypto cards linked to Visa, Mastercard and RedotPay over potential FEMA and payment regulation violations.
- Indian users have reported card deactivations, while RedotPay had already listed India as a restricted region in an August 2026 notice.
India’s Reserve Bank of India (RBI) and Financial Intelligence Unit-India (FIU-IND) are examining offshore crypto cards that allow residents to spend digital assets on everyday purchases and withdraw cash from ATMs, according to a November 2 report by The Economic Times.
The scrutiny centres on whether these cards comply with Indian payment regulations and the Foreign Exchange Management Act (FEMA). The report, citing two people familiar with the matter, said authorities are also understood to be in contact with Visa and Mastercard. Neither the RBI nor the payment networks confirmed the discussions.
The cards, offered by overseas fintech providers such as RedotPay, allow users to spend stablecoins and other cryptocurrencies through conventional payment networks. When a transaction takes place, the provider converts the required crypto balance into rupees, allowing merchants to receive payment like a regular card transaction.
Users have reportedly used these cards for online shopping, mobile recharges, flight bookings and ATM withdrawals. Some cards cost between $40 and $50 and carry a three-year validity, according to the report.
Several Indian users have also complained on social media that their cards stopped working in recent days. Access to some service providers’ websites has reportedly been restricted.
FEMA and Payment Authorisation Concerns
The scrutiny follows findings shared with authorities by Bengaluru-based Digital South Trust. The organisation obtained a virtual Visa-backed RedotPay card and carried out multiple domestic online transactions in August. Its founder, Sudhakar Lakshmanaraja, said the group documented how offshore card programmes could fund routine payments using cryptocurrencies and dollar-backed stablecoins. He also raised concerns about some programmes advertising limited or no KYC requirements.
Legal experts cited by The Economic Times said the arrangements could raise questions under FEMA and regulations governing prepaid payment instruments. Under RBI rules, entities operating prepaid payment systems in India generally require the necessary authorisation.
RedotPay had already listed India among the regions where residents were ineligible for its virtual and physical cards in a restriction notice dated August 28, 2026.
However, no public enforcement order specifically naming RedotPay, Visa or Mastercard has been announced. The reported scrutiny does not establish that any of the companies have violated Indian law.
