At the moment India situation has been worsening, reading a lot of reports which suggest fll out ban with criminal charges who dont obey.

But in general it could be interpreted as illegal since you are makeing new currency in country where there is only one legal currency.
You can say that there was a "precident" with Estonia and the governing EU , they shut Estonia's idea right down -> https://qz.com/1072740/mario-draghi-of-the-ecb-dashes-estonias-plan-for-an-estcoin-cryptocurrency-backed-by-the-government/