As global economies race ahead with decisive crypto regulations, India finds itself tangled in endless debates, unable to take concrete steps forward. While the government has introduced measures such as bringing Virtual Digital Assets (VDAs) under the Prevention of Money Laundering Act (PMLA) and imposing taxes on crypto transactions, these fragmented efforts lack a clear direction. The result? Indian Investors remain in a state of uncertainty and as the world embraces digital finance, India risks being left behind.
The European Union has implemented a clear set of rules under its Markets in Crypto-Assets (MiCA) regulation, ensuring transparency and innovation. The newly elected U.S. government has also introduced a regulatory framework for cryptocurrencies while stopping the development of Central Bank Digital Currencies (CBDCs). The U.S. government holds 198,109 BTC worth over $20 billion, showing how other countries are integrating digital assets into their financial systems.
India, despite recognizing the need for crypto regulations in the G20 Delhi Declaration, has not yet released a formal discussion paper. This delay is discouraging investment and slowing down growth in India’s blockchain sector.
Even with unclear regulations, Indian crypto traders are actively participating in the market. Recently, meme tokens related to global political figures gained popularity on Indian exchanges, leading to a rise in USDT premiums. Bitcoin prices have also surged globally, attracting investors. However, with high taxes and regulatory confusion, many Indian traders are shifting to offshore platforms.
Although India has imposed taxes on VDAs and placed Virtual Asset Service Providers (VASPs) under PMLA compliance, high taxes, unclear rules on losses, and a lack of classification for different digital assets—such as stablecoins and security tokens—are holding back investors and businesses.
The Digital India Act could provide some clarity, but progress has been slow. India needs a dedicated law for cryptocurrencies to ensure transparency, protect investors, and support innovation in the blockchain sector.
India’s delay in regulating cryptocurrencies is putting the country at risk of falling behind. As other nations move forward with strong policies, India must take decisive action. Without clear regulations, the country might miss the chance to become a leader in blockchain and digital finance.
