-
India’s crypto landscape may soon transform with the introduction of the COINS Act, a model law designed to clarify regulations and foster innovation in digital assets.
-
The Act proposes establishing a dedicated regulatory body and enshrining fundamental crypto rights, aiming to resolve longstanding legal ambiguities and punitive taxation issues.
-
According to Hashed Emergent’s Vishal Achanta, the COINS Act seeks to reposition India from a “regulatory minefield” to a preferred destination for crypto developers and investors alike.
Discover how the COINS Act aims to bring regulatory clarity, protect crypto rights, and promote innovation in India’s digital asset sector.
COINS Act Addresses India’s Crypto Regulatory Ambiguity and Taxation Challenges
The COINS Act emerges as a comprehensive response to India’s fragmented and often punitive regulatory environment surrounding cryptocurrencies. Legal counsel Arvind Alexander highlights that the absence of clear, principled legislation has left builders and users vulnerable to inconsistent enforcement and heavy taxation. Currently, profits from virtual digital assets face a flat 30% tax, alongside a 1% tax deducted at source on transactions exceeding $115, creating significant financial burdens for market participants. The model law innovatively proposes enshrining fundamental crypto rights—such as self-custody, privacy, and permissionless access—as constitutional extensions, thereby providing a robust legal foundation that protects users and developers alike.
Introducing the Crypto Assets Regulatory Authority (CARA) for Streamlined Oversight
To tackle regulatory uncertainty, the COINS Act recommends the formation of the Crypto Assets Regulatory Authority (CARA), a specialized body designed to oversee crypto activities with tailored governance. Drawing inspiration from the European Union’s MiCA framework and Singapore’s sandbox approach, CARA aims to balance innovation with consumer protection. The Act delineates compliance requirements based on custody models: centralized exchanges would undergo rigorous licensing, non-custodial protocols would adhere to simplified disclosure norms, and permissionless protocols would remain exempt from regulatory burdens. This tiered approach is intended to foster a dynamic yet secure crypto ecosystem in India.
Reversing Developer Exodus and Proposing a Strategic Bitcoin Reserve
India’s crypto sector has witnessed a significant outflow of talent and projects due to regulatory ambiguity and heavy taxation. Vishal Achanta emphasizes that the COINS Act is strategically designed to reverse this trend by creating a “rights-first” environment that encourages innovation and investment. A notable feature of the model law is the proposal for a national Bitcoin reserve, which would convert legally seized crypto assets into a parliamentary overseen reserve. This initiative aligns with recent political calls for a Bitcoin reserve pilot, aiming to enhance economic resilience and integrate digital assets into India’s financial infrastructure.
Engaging Stakeholders Through Collaborative Workshops and Policy Dialogues
To promote adoption and refine the framework, Hashed Emergent and Black Dot plan to engage with key government bodies, including the Ministry of Finance, SEBI, and the Reserve Bank of India, through targeted workshops and discussions. Legal counsel Arvind Alexander stresses the importance of community-driven advocacy, inspired by the collaborative ethos of the Bitcoin white paper, to influence policymakers transparently and effectively. This inclusive approach aims to ensure that the COINS Act evolves in alignment with industry needs and regulatory best practices, fostering a sustainable crypto ecosystem in India.
Conclusion
The COINS Act represents a significant step toward resolving India’s crypto regulatory challenges by proposing clear legal rights, a dedicated regulatory authority, and innovative economic strategies such as a Bitcoin reserve. By prioritizing transparency, legal certainty, and stakeholder collaboration, the model law offers a pragmatic blueprint that could transform India into a global crypto hub. Continued dialogue and community engagement will be essential to translating this vision into actionable policy, ultimately benefiting developers, investors, and the broader digital economy.
