Key Highlights
- GNLU report proposes five regulatory models to guide India’s approach to crypto asset regulation.
- Nearly 12 crore Indians are already engaging with crypto, despite the absence of a dedicated legal framework.
- Former Supreme Court judges and legal experts called for clear rules to protect investors and support innovation.
A new report released by Gujarat National Law University (GNLU) has called for a comprehensive regulatory framework for crypto assets in India, arguing that the country can no longer operate without clear rules in a rapidly expanding digital asset market.
Titled “Crypto-Assets in India: Assessing the Case for Regulation,” the report was launched on Tuesday at The Lalit in New Delhi. The research initiative was undertaken by GNLU in partnership with the Society of Indian Law Firms (SILF).
The launch event was attended by former judges of the Supreme Court of India and the Gujarat High Court, along with senior lawyers, policy experts, and representatives from the digital asset industry.
The report studies how crypto assets are currently treated from a regulatory perspective in India. It also suggests a structured approach to regulation that attempts to balance innovation with investor protection and financial stability.
India at a regulatory crossroads
The report says India is at an important stage when it comes to shaping rules for digital assets. In recent years, the government has introduced certain measures, such as taxation on virtual digital assets and extending anti-money laundering obligations to crypto intermediaries.
However, the absence of a dedicated law for crypto assets continues to create uncertainty for market participants.
Officials at GNLU said this lack of regulatory clarity could affect capital flows, slow innovation, and limit the growth of the digital asset industry in India.
The report adds that a clear and forward-looking regulatory framework will be necessary if India wants to stay competitive in the global Web3 ecosystem. Many large economies around the world have already introduced clearer rules to regulate crypto assets, the report noted.
Five regulatory models proposed
Looking at regulatory approaches in other countries and broader global policy trends, the report outlines five possible models that Indian policymakers could consider while developing a regulatory framework for crypto assets.
Some of these models suggest placing the sector under the supervision of existing financial regulators. Another approach proposes allowing the industry to follow a system of self-regulation for a limited period, but under the oversight of the government until a stronger regulatory framework is put in place.
The report also recommends a balanced structure that includes institutional oversight along with coordination between different regulators.
According to the report, such a framework could strengthen consumer protection, address risks linked to financial stability and illicit finance, while also allowing blockchain-based innovation to grow.
Growing crypto participation in India
The report highlights the scale of crypto adoption in India. It notes that nearly 12 crore Indians are already engaging with crypto assets even though there is no comprehensive regulatory framework in place.
Prof. (Dr.) S. Shanthakumar, Director of Gujarat National Law University, said the project grew out of academic discussions on a regulatory grey area.
“What began as a classroom discussion on a regulatory grey area eventually evolved into a national research initiative. With nearly 12 crore Indians engaging with crypto assets despite the absence of a comprehensive regulatory framework, we felt it was important for academia to contribute to the policy conversation.”
He said the university conducted consultations with stakeholders across several cities.
“Through stakeholder consultations in Bengaluru, Mumbai and Delhi involving developers, exchanges, regulators and legal experts, the university sought to understand the technology and its challenges. The report ultimately presents five possible regulatory models, leaving policymakers with practical options to consider while shaping India’s approach to crypto regulation.”
Judiciary voices support for regulatory clarity
Several former judges who attended the launch highlighted the need for a clear regulatory framework for the sector.
Justice Hima Kohli, Former Judge, Supreme Court of India, said, “Crypto assets illustrate the broader challenge that legal systems face when technological innovation evolves faster than legislative processes.”
She noted that the policy discussion is now shifting toward regulation rather than the existence of the technology itself.
“Today, with the global crypto market exceeding $2.4 trillion and India emerging as one of the largest markets with millions of users, the policy debate is no longer about whether such technologies should exist but about how they should be regulated.”
Justice M. R. Shah, Former Judge, Supreme Court of India, also highlighted the scale of participation in the sector. “With nearly 12 crore Indians already investing in crypto assets, it is no longer possible to simply ignore this sector.”
He added that taxation was only an initial step and stronger regulatory measures would eventually be required. “The government’s decision to tax income from virtual digital assets is an important first step, but comprehensive regulation will be essential to strengthen confidence in this emerging ecosystem.”
Justice Ravi Tripathi, Former Judge, Gujarat High Court, emphasized the importance of academic research in shaping policy debates. “In an era where technology is rapidly transforming society and the economy, institutions cannot afford to ignore emerging developments such as crypto assets.”
Advisory board and research process
The project was guided by an advisory board comprising legal experts, former bureaucrats, and technology specialists. Members included Justice M. R. Shah, Justice Ravi Tripathi, former Gujarat Chief Secretary Rajkumar, former Additional Chief Secretary J. P. Gupta, and former Director General of Police Dr. Keshav Kumar.
Senior advocate N. S. Nappinai, Professor Vijaya Bhaskar Marisetty of IIM Visakhapatnam, blockchain expert Prof. M. K. Bhandari, online dispute resolution expert Chittu Nagarajan, advocate Mitali Gupta, Flugelsoft Group Managing Director Kalyanjit Hatibarua, and actor Kabir Bedi were also part of the advisory group.
According to GNLU, the report is the outcome of consultations held in Bengaluru, Mumbai, and Delhi with developers, exchanges, regulators, and legal experts.
The study concludes that as the global crypto market crosses $2.4 trillion and India emerges as one of the largest user bases, a clear regulatory approach will be necessary to ensure both innovation and financial safeguards in the country’s evolving digital economy.
Also Read: India’s Crypto Crackdown is Working Perfectly. That’s Exactly the Problem
