India Investigates Offshore Crypto Cards as RedotPay Users Face Payment Issues
India’s financial regulators are reportedly examining offshore cryptocurrency payment cards that allow residents to spend digital assets in rupees. The Reserve Bank of India (RBI) and Financial Intelligence Unit-India (FIU-IND) are reviewing services including RedotPay over potential regulatory violations.
The development comes after several Indian users reported 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.
Offshore Crypto Cards Face Regulatory Scrutiny
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. Consequently, transactions can resemble ordinary debit card payments despite originating from offshore cryptocurrency wallets.
The 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.
RedotPay Users Report Card Deactivations
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.
However, regulators have not publicly confirmed a nationwide prohibition targeting RedotPay or similar services. The reasons behind individual card disruptions also remain unconfirmed.
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.
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.
For Indian users, uncertainty surrounding offshore crypto cards could affect access to digital asset balances and everyday payment services. The outcome will depend on regulatory findings and whether providers can demonstrate compliance with India’s financial regulations.
