Strong Growth in Crypto Adoption
India leads globally in grassroots crypto use for the second year (Chainalysis 2024 report).
Indian retail investors have invested $6.6 billion in crypto.
The crypto industry in India could create over 8 lakh (800,000) jobs by 2030.
India also has one of the fastest-growing communities of Web3 developers.
Regulatory Challenges
Despite growth, India lacks clear and complete crypto laws.
The Supreme Court questioned this policy gap in 2025, warning against ignoring reality.
RBI has long been cautious about crypto, banning banks from dealing with it in 2018 — a ban overturned in 2020.
In 2022, the government imposed high taxes:
1% TDS on trades over ₹10,000
30% tax on gains, with no loss deduction allowed
These rules pushed many users to offshore platforms to avoid taxes and restrictions.
Issues with Offshore Trading
Indians traded over ₹3.6 trillion in crypto on foreign, non-compliant platforms between 2022 and 2024.
Only 9% of crypto is held on Indian exchanges.
The government lost over ₹6,000 crore in tax revenue due to offshore trading.
Blocking foreign platforms (via URLs) had little effect, as users used VPNs and other tools to bypass them.
Role of Indian VASPs and Need for Clear Laws
Virtual Asset Service Providers (VASPs) in India are trying to follow global standards.
They work with agencies like the Financial Intelligence Unit to fight money laundering and terrorism financing.
After a $230 million hack in 2024, Indian platforms boosted cyber safety and set up insurance and industry rules.
VASPs are key to creating a safe crypto system in India.
India urgently needs a full, balanced, and modern legal framework — one that encourages growth while managing risks.
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