The crypto regulation in India could take a surprising turn this month. On September 16, the Finance Ministry is expected to appear before a parliamentary panel, with the discussion particularly focusing on virtual digital assets (VDAs). Thus, the meeting could bring some changes to the way India sees crypto, expanding rules beyond taxation and anti-money laundering.
India’s Crypto Regulation Faces Key Test on September 16
As per the latest reports, the Finance Ministry’s Department of Economic Affairs (DEA) is expected to present its views on crypto before the Standing Committee on Finance on September 16. The hearing comes as part of the ongoing study, “A Study on Virtual Digital Assets (VDAs) and Way Forward.”
Notably, the meeting was initially scheduled on August 27, 2026. But it was then cancelled without announcing a new date. Now, the government has confirmed the hearing on September 16, with all eyes now focusing on what the Finance Ministry will speak about India’s approach to VDAs and the future of crypto in the country.
What Will the Finance Ministry Discuss?
Significantly, the upcoming meeting is expected to bring some clarity to India’s crypto market. For a long time, some questions have remained unanswered in the space. These include the agency responsible for crypto regulation and the exact definition and classification of digital assets.
Another major aspect is taxation. Although the government already has a clear structure for crypto taxation, imposing taxes on activities through offshore platforms remains a challenge. Thus, the meeting is set to discuss this challenge, aiming to provide more clarity to the government’s direction on crypto regulation.
Does India Actually Regulate Crypto Today?
Despite the significant growth of crypto in India, the government has failed to launch a comprehensive framework for the market. The country sees crypto as Virtual Digital Assets (VDAs) and imposes a 30% tax on gains and 1% TDS on transactions. Crypto exchanges and related businesses are also covered by anti-money laundering rules. But these rules do not mean that the country has a complete and clear crypto regulation.
Why So Much Indian Crypto Trading Happens Offshore
It is worth noting that a large share of Indian crypto trading happens on offshore exchanges now. According to a recent study, about 91.5% of India’s crypto trading volume in FY2024-25 was done through offshore platforms. This is significantly higher when compared with the 8.5% on domestic exchanges. One of the major reasons for this vast difference is the country’s 1% TDS. This has encouraged traders to move their activity to overseas platforms, as tax is not automatically deducted there.
What Is the Government Trying to Solve?
Importantly, the government is trying to address the gaps created by the absence of clear crypto regulations. One of the key concerns that will be addressed is offshore crypto activity. Investor protection and related rules will also be a major concern. Also, the government will discuss the importance of bringing clarity on who regulates VDAs and what defines digital assets.
“Pending the establishment of a comprehensive legislative framework, the Government may consider introducing an interim regulatory mechanism through recognized Self-Regulatory Organisations (SROs) operating under the oversight of the designated regulator,” the committee previously stated.
Why the RBI’s Position Matters
The RBI continues to take a cautious stance on VDAs, raising concerns about their volatility and inherent risks. The bank doesn’t want to treat VDAs as currency due to their potential harm to the country’s financial stability and risks to investors. This stance may affect the country’s crypto regulatory efforts in a negative way. While the RBI had previously argued for banning cryptocurrencies, its current position will be important as the government is looking to regulate the industry.
What Could Change for Indian Crypto Users?
The September 16 hearing is unlikely to bring major changes to India’s crypto space. The ministry may not introduce new crypto regulations. But the meeting may bring more clarity on the government’s approach to crypto. If the country decides to move forward with new crypto regulatory initiatives after the meeting, Indian users could eventually see a more defined space. It could also help the country’s crypto market to grow with clear rules and safeguards.
In simple terms, the committee could recommend clearer rules on crypto regulation, asset classification, taxation, and offshore trading, following the meeting.
Related: India’s New Crypto Tracking Cell: What Indian Traders Should Know About Their Transactions
