India Risks Falling Behind in Crypto Race Without Clear Policy

Sumit Gupta, the founder of CoinDCX, has raised concerns about India’s lack of a clear crypto roadmap, highlighting the country’s vulnerability amidst rapid regional and global developments in digital finance. On May 28, Gupta took to the X platform to emphasize the geopolitical significance of digital assets, referencing an article by C. Raja Mohan in The Indian Express. Gupta noted that while India leads in crypto adoption and innovation, it still lacks a forward-looking policy, which could result in the country missing out on the global financial shift.

Gupta’s warning comes at a critical juncture as neighboring countries, such as Pakistan, are making strategic moves in the crypto space. Pakistan recently signed a Memorandum of Understanding (MoU) with World Liberty Financial Inc. (WLFI), a U.S.-based firm linked to the Trump family. This agreement aims to boost Pakistan’s financial inclusion and position it as a regional crypto hub. This development has raised serious concerns in New Delhi, particularly regarding the decentralized nature of cryptocurrencies and their potential misuse for activities like terrorism financing and cross-border money laundering. Indian security experts emphasize the need for a clear crypto strategy to mitigate these risks and protect the country’s financial and national security interests.

Globally, countries like the United States, Russia, China, and the UAE are leveraging strategic crypto reserves to reshape their financial landscapes. The U.S. has accumulated over $4 billion in Bitcoin by halting the auctioning of seized crypto. Russia uses cryptocurrencies to bypass sanctions, while China, despite banning trading, holds seized Bitcoin. These reserves serve as digital gold, providing countries with economic strength and technological leverage. They help hedge against inflation, diversify risk, and act as buffers during crises. A strategic crypto reserve also signals a country’s commitment to Web3 leadership. India, with its $620 billion forex reserve, could diversify by allocating 1–2% into Bitcoin, Ethereum, or stablecoins, thereby securing its position in global crypto leadership.

India’s position as a leader in grassroots crypto adoption and its top-tier Web3 developer base are significant advantages. However, experts note a lack of regulatory clarity, which hinders the country’s ability to fully capitalize on these strengths. A well-structured crypto strategy could protect the economy, promote innovation, and stabilize the rupee. It could also support the rollout of the Digital Rupee, attract global investors, and fund government DeFi initiatives, pushing India ahead in digital finance. Tokenizing assets like gold could boost liquidity and integrate traditional finance with blockchain systems. Additionally, retaining seized crypto as part of the strategic reserve could provide economic benefits without public spending.

The global trend indicates that cryptocurrencies are evolving from mere investment tools to geopolitical assets. As countries shift away from dollar dependency, crypto is becoming a neutral trade settlement option. India risks being sidelined if it fails to act swiftly. Financial crises could worsen without crypto buffers, and technological lag may widen if India remains reactive. The risk of losing Web3 talent to crypto-friendly nations is also rising. To avoid falling behind, India must define its crypto policy now. The global digital economy is evolving rapidly, and India has the tools, talent, and momentum to lead. A timely crypto strategy could secure both national security and economic leadership in this new era.