India is being called upon to create a dedicated Digital Asset Regulatory Authority (DARA) by the end of 2025 or early 2026, according to a joint report from Blue Aster Capital and Crebaco Global. Highlighting India’s significant contribution to the global crypto ecosystem, the “Crypto Outlook 2024-2025” report emphasized the urgent need for regulatory reforms to address taxation, anti-money laundering (AML) compliance, investor protection, and integration with financial services.
The report noted that India accounts for 11.8% of global crypto developers and 5.4% of Web3 creators, underscoring its pivotal role in the digital asset space. It called for clear and streamlined regulations, particularly in taxation, where the report suggested distinguishing between long-term and short-term tax treatments for crypto assets. Additionally, it recommended lowering the tax deducted at source (TDS) rate on crypto transactions from 1% to 0.01% to encourage greater participation and compliance.
Navigating the Grey Area
The report shed light on the current challenges facing India’s crypto ecosystem in the absence of a regulatory framework. “Once a proper regulator comes into action, the Indian crypto ecosystem has nowhere else to go but North from where it is today.
In the absence of the regulator, India is facing a grey area for crypto, with near to zero transparency from exchanges to disastrous hacks with leading exchanges in the country which are not understood by many. Unfortunately, a lot of retail involvement is present in the country and the courts do not understand the system. This will be resolved only when the space is regulated,” the report stated.
It further anticipated the formation of a standing committee during the upcoming Budget session to present a draft Bill by the end of 2025, signaling a growing recognition of cryptocurrency’s importance in India’s financial landscape.
A Shift in Perspective
India’s stance on cryptocurrency has evolved significantly over the years. In 2019, a draft Bill was proposed to impose a blanket ban on cryptocurrencies, but it was never introduced in Parliament. Since then, the country’s outlook has shifted to align with global trends, with an increasing focus on regulation rather than prohibition.
The report forecasted a shift in India’s crypto sector from speculative trading to real-world applications and practical utility. “The future of crypto in India is about building a decentralised, inclusive, and innovative digital ecosystem. This transition reflects a broader market maturity and an increasing emphasis on real-world applications for digital assets,” it stated.
Paving the Way for Innovation
Vishal Sacheendran, Head of Regional Markets at Binance, expressed optimism about India’s potential to lead the way in comprehensive crypto regulation. “India has the opportunity to position itself as a global hub for crypto innovation,” he said.
The report also highlighted the remarkable growth of the global crypto market, which saw total market capitalization rise from $1.65 trillion to $3.4 trillion in 2024.
With its burgeoning tech talent and evolving regulatory approach, India is poised to play a pivotal role in shaping the future of cryptocurrency on a global scale.
