India is currently at a critical juncture regarding its cryptocurrency landscape, with industry leaders warning that regulatory delays are pushing top blockchain talent and innovation out of the country. Despite growing adoption, India does not yet have a comprehensive legal framework for digital assets, creating a regulatory vacuum that could have long-term economic repercussions.
The government’s hesitance stems from concerns over systemic risks, with authorities fearing that full regulation might destabilize the financial system or encourage illicit activities. Instead, India is adopting a cautious, partial oversight approach, focusing on taxation and anti-money laundering measures without establishing a full-fledged regulatory regime. As a result, many highly skilled crypto developers and entrepreneurs are seeking opportunities abroad, notably in regions with clearer legal environments like Singapore and the UAE.
A significant legal milestone was achieved when the Madras High Court recognized cryptocurrencies as “property” in late October 2025, providing a form of legal protection and clarity for investors and traders. However, without a clear regulatory framework, this legal recognition alone is insufficient for fostering sustainable industry growth.
Industry voices underscore the importance of swift legislation to safeguard India’s share in the digital economy. Padmanabhan, a senior expert, emphasized the need for India to adopt a stablecoin backed by the INR to protect monetary sovereignty and facilitate international remittances, which are over $125 billion annually. Such measures could help India compete globally and prevent further talent exodus.
In summary, while India has made some legal strides, the absence of a cohesive policy framework continues to hinder its potential in the crypto sector. Urgent regulatory action is essential to harness the full economic benefits and retain domestic talent in this rapidly evolving industry.
