From global agreements to local action: India's opportunity to lead the way in VDA governance

Economic Times

11 hours ago

The Virtual Digital Asset (VDA) ecosystem is one of the most exciting and rapidly growing sectors globally. What began with the publication of the Bitcoin whitepaper in 2008 has, in under two decades, evolved into a diverse and expansive global industry. Today, Bitcoin is just one component of a much broader landscape that includes tokens, smart contracts, decentralised finance, and blockchain infrastructure.
ADVERTISEMENT India has emerged as a global leader in this ecosystem. It has consistently ranked first on the Chainalysis Global Crypto Adoption Index and is home to one of the world's largest Web3 developer communities, as highlighted in the Electric Capital Developer Report 2024.
This sustained momentum presents a timely and strategic opportunity for India to engage with a technology that is rapidly moving from the margins to the mainstream of the digital economy.
During its G20 Presidency in 2023, India played a pivotal role in building global consensus on the need for a coordinated regulatory framework for VDAs—an urgent requirement at the time. Since then, most G20 jurisdictions have made significant progress. The European Union's landmark MiCA framework came into full force in December 2024, setting a global precedent. In the U.S., regulatory momentum has picked up, with the Securities and Exchange Commission (SEC) forming a dedicated Crypto Task Force, and a presidential executive order on the Bitcoin Reserve and the U.S. Digital Asset Stockpile pushing the agenda toward concrete legislative action. Most recently, on June 17, the U.S. Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. These developments highlight the critical role legislatures play in shaping emerging tech policy and demonstrate how both legislative and executive branches must work together to sustain regulatory momentum.
ADVERTISEMENT In India, however, a formal discourse on regulating VDAs remains absent. The current framework is limited to AML/CFT oversight, a steep taxation regime, and a proposal to collect and exchange data on VDA transactions via the CARF (Crypto-Asset Reporting Framework).
One of the glaring gaps in India's governance architecture is Parliament's limited engagement with emerging technologies, particularly VDAs and blockchain innovations. It is noteworthy that between 2021 and 2025, of the 52,116 questions asked in the Lok Sabha, only 0.063% were related to cryptoassets, cryptocurrency, or VDAs.
ADVERTISEMENT In the Rajya Sabha, this figure stands at 0.08% of the 32,398 questions from 2021–2024. As for debates, the 17th Lok Sabha saw only three discussions—two through Zero Hour speeches and one Special Mention. The ongoing 18th session has seen none so far. In 2021, Parliament did indicate its intent to develop a legislative framework on cryptoassets, but that effort did not move forward.Interestingly, India announced plans to release a Discussion Paper (DP) on VDAs in July 2024. The DP is a crucial first step; however, nearly a year has passed since the announcement, and the paper is still awaited. Its timely release, coupled with engagement from a proactive and informed Parliament, will be key to advancing this vision.
ADVERTISEMENT With only a handful of MPs currently equipped to navigate the nuances of digital innovation, there is a pressing need to build institutional capacity for informed legislative engagement. The Honourable Lok Sabha Speaker recently underscored the urgency of these issues, highlighting the importance of appropriate regulatory systems, data privacy protection, and equitable tech access being discussed across national parliaments.
ADVERTISEMENT The complexity of VDAs—spanning taxation, financial markets, security, privacy, and global compliance—requires robust and sustained parliamentary dialogue. Sustaining this momentum will require improving MP awareness through briefing sessions, committee consultations, and cross-party engagement.India's ambitious 'Viksit Bharat' vision for 2047 hinges on inclusive growth and leadership in not only digital public infrastructure but also sunrise sectors such as AI, digital technology, and—critically—fintech. As VDAs become an integral part of this landscape, the forthcoming Discussion Paper presents a timely opportunity to chart a clear, forward-looking regulatory path. But turning this opportunity into action will require more than just policy intent; it demands a proactive, informed, and engaged Parliament.A strong legislative foundation—grounded in debate and cross-party collaboration—will be essential for India to not only keep pace with global developments but also lead in shaping the future of digital finance and technology governance.
(R Venkatesh is Head of Public Policy at CoinSwitch, Saurya Mishra, LAMP Fellow, PRS Legislative Research and Monya is Senior Public Policy Analyst at CoinSwitch)
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(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)