Crypto, India, and the COINS Act: A New Dawn for Digital Assets?

India's crypto landscape is on the cusp of transformation with the COINS Act, potentially reshaping regulations and investor sentiment. Is this the dawn of a new era for digital assets in India?

Crypto, India, and the COINS Act: A New Dawn for Digital Assets?

India's crypto landscape is heating up! With the introduction of the COINS Act, the country is aiming to redefine its role in the global digital asset arena, potentially ushering in a new era of crypto regulation and adoption.

The COINS Act: A Game Changer?

The COINS Act, spearheaded by Hashed Emergent and Black Dot Policy Advisors, is making waves. The core mission? A 'rights-first' model law designed to tackle India's unique crypto challenges. This act focuses on embedding fundamental freedoms like self-custody, protocol access, and privacy directly into the regulatory framework. Imagine having the constitutional right to manage your own crypto – pretty cool, right?

CARA: The New Sheriff in Town

One of the key proposals is the creation of the Crypto Assets Regulatory Authority (CARA). Think of CARA as a specialized watchdog dedicated to overseeing the crypto industry within India. The COINS Act ensures CARA's focus remains on services targeting India, preventing overreach into decentralized global networks. This targeted approach is a smart move, allowing for focused regulation without stifling innovation.

A Tailored Approach: No One-Size-Fits-All

The COINS Act smartly avoids a blanket approach. Centralized exchanges would be licensed, non-custodial protocols would require simple disclosures, and truly decentralized platforms could be exempt. This nuanced approach, drawing inspiration from the EU's MiCA regime and Singapore's regulatory sandbox, could strike a balance between regulation and fostering growth.

Safe Harbors and Bitcoin Reserves?

Here's where it gets interesting. The COINS Act proposes temporary safe harbors for initial coin offerings (ICOs) launched in India, aiming to keep developer talent from fleeing to other countries. Furthermore, there's talk of establishing a strategic reserve of Bitcoin and other digital assets, managed nationally. Could India be positioning itself for crypto-asset sovereignty? It's a bold move that echoes global experimentation with state-backed Bitcoin reserves.

Addressing Past Issues

The need for such regulation stems from past vulnerabilities within the Indian crypto ecosystem. Incidents like the WazirX cyberattack in 2024 and the CoinDCX vulnerability in 2025 highlighted the absence of proper regulatory frameworks and investor protection. The COINS Act 2025 directly addresses these gaps.

The Tax Question

Currently, India imposes a hefty 30% tax on crypto income and a 1% TDS on transactions. The COINS Act aims to eliminate the 30% tax, which could significantly boost investor confidence and market participation. Combined with self-custody rights, this could give users more control and security over their investments.

Final Thoughts: Is India Ready for Crypto Prime Time?

The COINS Act represents a potentially massive step forward for India's relationship with digital assets. By tackling regulatory ambiguity and prioritizing investor protection, this legislation could lay the foundation for a more stable and vibrant crypto ecosystem. Will it be smooth sailing? Probably not. But with the COINS Act on the horizon, India's crypto future looks brighter than ever. Keep your eyes peeled—this story is just getting started!