India's next crypto policy: What a balanced regulatory framework should look like

India’s virtual digital asset (VDA) sector finds itself in a regulatory bind. While VDAs are recognised under tax law, subject to anti-money laundering obligations, and monitored by the Financial Intelligence Unit (FIU-IND), the country still lacks a comprehensive law governing the sector. As a result, businesses, consumers, and regulators have long operated without clarity on the legal status and future of the Indian VDA sector.

While India’s cautious approach has been shaped by legitimate concerns around financial stability, consumer protection, and illicit finance, global conversations on VDA regulation have evolved rapidly. The European Union has operationalised the markets in Crypto-Assets (MiCA) Regulation ¹ , the United States has advanced legislation such as the GENIUS Act ² and CLARITY Act ³ , while jurisdictions across Asia have introduced licensing and consumer protection frameworks ⁴ . International bodies such as the Financial Action Task Force (FATF), Financial Stability Board (FSB), and OECD have also developed common regulatory principles.