REGULATING INDIA'S VIRTUAL DIGITAL ASSETS REVOLUTION

There is a wide gap between reality and policy, creating challenges for regulators and market players

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India continues to lead in grassroots crypto adoption, for the second consecutive year in the 'Geography of Crypto' report by Chainalysis (2024). A National Association of Software and Service Companies (NASSCOM) report finds that Indian retail investors poured $6.6 billion into crypto assets and predicts the industry could create over eight lakh jobs by 2030. India also boasts one of the largest and fastest-growing web3 developer cohorts.

This vibrancy may seem surprising, given the rocky journey of crypto, known as 'Virtual Digital Assets' (VDA), in India, within the domestic regulatory and policy landscape. In May 2025, the Supreme Court of India questioned the absence of comprehensive and clear crypto regulation in India, with a remark, "Banning may be shutting your eyes to ground reality". This observation highlights the dissonance between VDA reality and VDA policy which has created significant challenges for regulators and market players.

Navigating India's VDA regulatory gaps