As our nation embraces the next wave of economic and technological progress, it’s vital that we actively participate in and clearly define our stance on this transformative technology.
Over the past year, conversations about crypto-asset regulation have shifted from whether to regulate, to how to regulate. The United States, once characterized by its ambiguous stance, is now taking significant steps to replace an enforcement-focused approach with a rules-based system.
Crypto Tracker
Recent legislative efforts aim to address jurisdictional overlaps between agencies and
to establish clear boundaries for stablecoins and investment vehicles utilizing crypto-assets. These aren’t just legal tweaks, they’re strategic moves to unlock mainstream investment, encourage technological advancement, and build public confidence in this emerging asset category.
The European Union’s recent implementation of the Markets in Crypto-Assets (MiCA) framework has raised the bar for regulatory standards globally. It’s the first example of a unified, cross-border regulatory system for crypto-assets. MiCA offers clarity for crypto businesses, strengthens consumer protections, and enhances the EU’s wider digital finance strategy.
Within Asia, key financial hubs are defining their regulatory agendas. Hong Kong is actively working to become a regional crypto-asset center, while Singapore has finalized its stablecoin regulations and maintains a strict licensing process for digital asset service providers.
Both regions are carefully balancing the promotion of innovation with the need for strong investor safeguards.
Japan, an early adopter, is continuously refining its Virtual Asset Service Provider (VASP) licensing system and requires the segregation of client funds, ensuring strong consumer protection.
South Korea is developing comprehensive legislation to consolidate crypto-asset oversight and establish clear standards for disclosure, reserve requirements, and cybersecurity protocols.
In the Middle East, the United Arab Emirates is strategically positioning itself as a leading destination for global fintech companies through regulatory frameworks led by Dubai’s Virtual Asset Regulatory Authority (VARA) and Abu Dhabi’s Financial Services Regulatory Authority (FSRA). These authorities have implemented licensing programs, regulations for virtual asset exchanges, and regulatory sandboxes to encourage innovation while maintaining strict compliance.
Given this global landscape, India‘s current position requires careful consideration. While progress has been made in areas like taxation and financial intelligence related to digital assets, the lack of a publicly accessible, principles-based discussion paper on crypto-asset regulation remains a significant shortcoming.
India has demonstrated global leadership in developing digital public infrastructure, seen in initiatives like UPI, Aadhaar, and ONDC. Therefore, the perceived delay in proactively shaping the future of digital assets seems inconsistent with this established track record.
Our Fintech innovators possess world-class skills, consumers have a strong appetite for digital solutions, and our developers are vital to the global crypto-asset infrastructure. However, the absence of a clear domestic regulatory framework risks the migration of both capital and talent to more welcoming and promising environments.
A structured national dialogue, based on informed debate rather than reactive measures or inconsistent signals, is more crucial than ever. Publishing a comprehensive discussion paper would be an ideal first step in initiating this vital process. Furthermore, India is scheduled for a Financial Stability Board (FSB) peer review in October 2025, which will assess our nation’s preparedness and adherence to international crypto-asset regulatory standards.
Demonstrating a clear regulatory intent before this review is paramount. In addition, September 2025 marks the second anniversary of the G20 Delhi Declaration, which emphasized the critical need for global collaboration in regulating the crypto-asset ecosystem.
India can no longer afford to delay decisive action in this area. The global environment is rapidly evolving, and it is essential that we align our course accordingly.
(The author Shri G M Harish Balayogi is a Member of Parliament)
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)