CRYPTOCURRENCY REGULATION IN INDIA
BETWEEN THE VIRTUAL DIGITAL ASSETS FRAMEWORK AND LEGISLATIVE VACUUM
AUTHOR – PRIYANKA. B, STUDENT AT SCHOOL OF EXCELLENCE IN LAW, TAMILNADU DR. AMBEDKAR LAW UNIVERSITY, CHENNAI
BEST CITATION – PRIYANKA. B, CRYPTOCURRENCY REGULATION IN INDIA, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (9) OF 2026, PG. 1022-1030, APIS – 3920 – 0001 & ISSN – 2583-2344.
EXECUTIVE SUMMARY
India stands at a critical crossroads in its approach to cryptocurrency and virtual digital assets (VDAs). As the second-largest crypto market by user base globally, with over 107 million active participants and $6.6 billion in retail investments in 2024, the country operates without a dedicated regulatory statute — a paradox that the Supreme Court of India itself has called “completely obsolete.”
The current landscape is defined by a patchwork of partial frameworks: VDAs are formally defined under the Income Tax Act, 1961; exchanges are designated as “reporting entities” under the Prevention of Money Laundering Act, 2002; and the CERT-In cybersecurity directions apply to crypto platforms. Yet there is no licensing regime, no investor protection law, no token classification system, and no dedicated regulatory authority.
This research paper examines the historical arc of Indian crypto regulation, the architecture of the existing VDA framework, the constitutional and legal tensions it creates, the positions of key regulatory actors, and the emerging legislative proposals — including the landmark COINS Act 2025 — that seek to end India’s prolonged regulatory vacuum.