This article was first published on TurkishNY Radio.
India’s rapidly expanding digital asset market is drawing renewed calls for legal clarity.
A newly released study from Gujarat National Law University (GNLU) argues that crypto regulation in India has become unavoidable as adoption rises and the global crypto market continues to expand.
The report, titled “Crypto-Assets in India: Assessing the Case for Regulation,” was unveiled in New Delhi in collaboration with the Society of Indian Law Firms (SILF).
Former judges, legal experts, policymakers, and digital-asset industry representatives attended the launch, highlighting the increasing seriousness of policy discussions around the sector.
According to the report, the absence of a dedicated legal structure for crypto assets leaves investors and businesses operating in uncertainty. At the same time, participation continues to rise, with an estimated 12 crore Indians already engaging with digital assets.
The findings emphasize that crypto regulation in India is no longer a theoretical debate. Instead, it has become a policy issue tied to investor protection, financial stability, and technological development.
Crypto Regulation in India Lags Behind Market Growth
Although India has introduced certain measures addressing digital assets, the country still lacks a unified regulatory framework.
For instance, the government imposed a 30% tax on income from virtual digital assets and introduced a 1% tax deducted at source (TDS) on crypto transactions under the Income Tax Act.
These steps acknowledge the presence of the industry but do not fully regulate it. Many market participants argue that taxation without a structured regulatory framework creates confusion for investors and companies.
The GNLU report states that crypto regulation in India must move beyond taxation and address areas such as licensing, compliance standards, consumer safeguards, and institutional oversight.
The government has also extended anti-money-laundering obligations to crypto service providers through rules issued by the Financial Intelligence Unit – India, requiring exchanges and related platforms to follow reporting and compliance standards.
Still, legal experts say these steps represent partial oversight rather than a full regulatory system.
Crypto Regulation in India Gets Five Policy Models
To help policymakers move forward, the GNLU study outlines five possible regulatory models that India could adopt.
Some proposals suggest placing the digital-asset sector under the supervision of existing financial regulators. Others recommend a temporary self-regulation model where industry bodies operate under government monitoring until a stronger regulatory structure is developed.
Another option calls for coordinated oversight among multiple regulators, recognizing that crypto assets intersect with payments, securities markets, and financial compliance frameworks.
The report argues that a balanced structure could strengthen consumer safeguards while still allowing blockchain-based products and services to develop responsibly.
In this context, the debate around crypto regulation in India centers on designing rules that reduce risk without blocking technological progress.
Former Judges Stress Urgency of Policy Action
Several former members of the judiciary who attended the launch stressed the need for legal clarity as the digital asset sector grows.
Hima Kohli said technological development often moves faster than legislation.
“Crypto assets illustrate the broader challenge that legal systems face when technological innovation evolves faster than legislative processes,”
she said.
She added that the global discussion has already shifted from questioning whether crypto should exist to determining how it should be governed.
- R. Shah pointed to the scale of participation in India’s crypto economy.
“With nearly 12 crore Indians already investing in crypto assets, it is no longer possible to simply ignore this sector,”
he said.
According to him, the government’s taxation policy marked an early step toward recognizing the sector, but crypto regulation in India will eventually require stronger and clearer legislation.
India’s Adoption Levels Add Pressure for Regulation
India’s user base is among the largest in the world, reflecting strong retail interest in digital assets. Research from Chainalysis has repeatedly ranked India among the top countries for grassroots crypto adoption.
This level of participation means that millions of individuals are already exposed to the market despite the absence of a clear rulebook. The GNLU study suggests that ignoring this reality could lead to investor risk and missed economic opportunities.
Academic institutions, policymakers, and industry representatives are therefore increasingly engaging in discussions about crypto regulation in India.
A Policy Debate that is Moving Toward Regulation
The GNLU report does not recommend a single solution but instead presents several policy pathways for lawmakers to consider. Its broader conclusion is that India must develop a structured approach that balances market growth with financial safeguards.
As the global crypto market surpasses $2.4 trillion, India’s position as one of the largest user bases places it at a decisive policy moment.
What remains uncertain is the timeline for a formal regulatory framework. However, the discussion around crypto regulation in India is clearly entering a more serious phase as policymakers, legal experts, and market participants evaluate the country’s next steps.
Summary
- A new report by Gujarat National Law University calls for clearer crypto regulation in India as the digital asset sector continues to expand.
- Around 12 crore Indians are already involved in crypto trading and investment.
- The study outlines five possible regulatory approaches for policymakers.
- Former judges Hima Kohli and M. R. Shah emphasized the need for legal clarity.
- Experts say structured regulations could protect investors while supporting technological development.
Glossary of Key Terms
1. Crypto Regulation in India
These are the rules the government may introduce to manage how cryptocurrencies are used and traded. The goal is to protect investors and keep the market fair.
2. Cryptocurrency
Cryptocurrency is digital money that exists only online. People can use it to send payments or invest, and it works without a traditional bank.
3. Blockchain
Blockchain is the technology behind cryptocurrencies. It acts like a shared digital record book where every transaction is stored securely and cannot be easily changed.
4. Virtual Digital Assets (VDA)
This is the official term the Indian government uses for cryptocurrencies and similar digital assets when applying tax and financial regulations.
5. Crypto Exchange
A crypto exchange is an online platform where people can buy, sell, or trade cryptocurrencies, similar to how stock exchanges work for company shares.
6. Investor Protection
Investor protection refers to rules designed to keep people safe from fraud, scams, or unfair practices when they invest in financial products like cryptocurrencies.
7. Anti-Money Laundering (AML)
AML rules help stop criminals from hiding illegal money through financial systems. Crypto platforms must follow these rules and report suspicious activity.
8. Regulatory Framework
A regulatory framework is a clear set of laws and guidelines that explain how an industry should operate. For crypto, it defines rules for companies and protections for users.
FAQs About Crypto regulation in India
1. What does the GNLU report say about crypto in India?
The report from Gujarat National Law University highlights the growing use of crypto in India and explains why clear rules are needed to protect users and guide policymakers.
2. Why are experts calling for crypto regulation in India now?
Experts say regulation is necessary because around 12 crore Indians already use crypto. Clear laws could improve transparency, reduce risks, and create a safer environment.
3. How could crypto regulation help users and businesses in India?
Clear crypto regulation in India could boost trust in the market, protect investors, and give businesses the confidence to build blockchain services without uncertainty.
4. What risks exist if India delays crypto regulation?
If clear rules are delayed, investors may face uncertainty, businesses could struggle to operate legally, and innovation might move to countries with clearer digital asset regulations.
