India’s crypto rethink: Experts say it’s time to act or risk losing edge – Cryptocurrency News

India’s crypto industry is abuzz with reactions following reports that the government is reviewing its stance on digital assets. As global regulatory frameworks for cryptocurrencies gain momentum, India’s policymakers appear to be reassessing their approach. The move comes amid concerns that India could lag in crypto and Web3 advancements if clear regulations are not established.

While the Budget 2025 did not introduce any direct relief, the discussion paper, pending since September last year, on revised regulations signals potential progress, according to crypto exchanges in the country. 

Vikram Subburaj, CEO at Giottus said relooking at crypto policies reflects the willingness of the government to respond to global events and macroeconomic trends.

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“This also stems from the realisation that India could lose out on becoming the crypto and Web3 powerhouse if we back out of bringing in strong regulations that protect investors and encourage innovation,” he said.

India’s reported stance to review the crypto framework follows the change in regulatory and policy climate in the US towards crypto adoption with US President Donald Trump announcing executive orders. For instance, setting up a presidential working group tasked with developing a federal regulatory framework for digital assets.

“It is encouraging to see the Department of Economic Affairs (DEA) recognize global regulatory advancements in crypto, particularly in areas like international remittances. However, despite discussions at the G20, India has yet to take a concrete stance, while other major economies have already moved forward with regulatory frameworks,” said Sumit Gupta, Co-founder, CoinDCX. 

For instance, Gupta said, the European Union has implemented MiCAR, South Korea has VAUPA (Virtual Asset User Protection Act), Hong Kong has introduced new licensing regimes, and China has established AML regulations for crypto.  

“Brazil, Turkey, and the UK have also introduced comprehensive crypto regulations. Essentially, every major economy except India has made progress. The crypto industry is dynamic, with rapid technological advancements. This should not be an excuse for regulatory inaction,” he added. 

Importantly, India has led the global adoption of cryptocurrencies for the second consecutive year. From June 2023 to July 2024, the country ranked high in the usage of both centralized exchange and decentralized finance assets. 

Hence, a relook at the crypto measures assumes further significance. 

In light of this, Sathvik Vishwanath, Co-founder and CEO of Unocoin believes the government might slowly reconsider its stance as the crypto space keeps growing globally.  

“Right now, it’s cautious, but if the industry continues to push for clearer rules and better tax frameworks, we could see a shift. It’s all about striking a balance between encouraging innovation and protecting investors, so they’ll likely adjust if the demand and discourse around crypto get stronger,” he said. 

Meanwhile, the government has tightened the compliance requirements around crypto. Finance Minister Nirmala Sitharaman in this year’s budget proposed amending the Income Tax Act for entities including crypto exchanges to disclose transaction details related to crypto assets. The minister also proposed adding the term “virtual digital asset” (VDA) to the definition of undisclosed income of the block period. 

Sonu Jain, Chief Risk and Compliance Officer at digital assets management company 9Point Capital said the proposed amendments especially the one dealing with reporting of all crypto trading details by exchanges to the government under section 285BAA is in line with OECD’s CARF to combat global tax evasion related to digital assets.  

“This information will then be relayed to all OECD member nations to ensure Tax authorities across the world are able to crack down on tax evaders,” said Jain. 

Sitharaman had also proposed adding the term “virtual digital asset” (VDA) to the definition of undisclosed income of the block period. However, treating all crypto holdings under the lens of undisclosed income without distinguishing between active traders, long-term investors, and casual users creates an overregulatory burden, according to Thangapandi Durai, CEO of Koinpark. 

“The high tax incidence and stringent reporting requirements may accelerate capital outflows to foreign exchanges, reducing liquidity in domestic markets,” said Durai.

India’s crypto industry remains hopeful that a clearer regulatory path will emerge, fostering innovation while ensuring investor protection. However, stakeholders continue to call for decisive action to prevent India from falling behind in the rapidly evolving global digital asset landscape.