Bitcoin News Today: Hashed Emergent and Black Dot Introduce COINS Act for India’s Crypto Regulation

Web3 venture firm Hashed Emergent and policy advisory group Black Dot have introduced a model crypto law aimed at clarifying India’s regulatory framework around digital assets. The Crypto-systems Oversight, Innovation and Strategy (COINS) Act, announced on Monday, provides a legislative blueprint to support a clearer, industry-led policy environment for crypto in India. The model law is non-binding and does not carry any legal effect unless formally introduced and passed by the Indian parliament. However, it offers policymakers a blueprint on crypto-related digital rights, including self-custody, protocol access, and financial privacy. It also addresses key legal pain points in the country such as punitive taxation, regulatory uncertainty, and the absence of a dedicated crypto regulator.

The model law recommends the creation of a new regulatory body called the Crypto Assets Regulatory Authority (CARA) to oversee crypto activities in India. It incorporates global standards from the European Union’s Markets in Crypto-Assets Regulation (MiCA) and Singapore’s regulatory sandbox, tailored to India’s market and constitutional context. The COINS Act was spurred by India’s regulatory uncertainty, with much-delayed, after-the-fact advisories but no clear principled laws. Builders and users lack express legal rights to self-custody, privacy, and permissionless protocol access, while being subjected to an “extreme tax regime” and unclear Anti-Money Laundering and Know Your Customer mandates. Under India’s Income Tax Act, profits from selling virtual digital assets (VDAs) are taxed at a 30% flat rate. Furthermore, the country applies a 1% tax deducted at source (TDS) to all transactions over $115, deducting it from either the buyer or the seller.

Arvind Alexander, legal counsel for Hashed Emergent, stated that the COINS Act starts by enshrining fundamental crypto rights as extensions of India’s Constitution, making them inviolable. The framework provides layered fundamental rights calibrated to actual custody and control profile. In this framework, centralized exchanges face full licensing requirements, non-custodial protocols subject to a simple disclosure regime, and truly permissionless protocols are fully exempt from compliance. The model law also tackles the issue of developer exodus and proposes a Bitcoin reserve. In the last decade, decentralized finance (DeFi) protocols, crypto gaming studios, and infrastructure projects from India have relocated offshore to escape the country’s “punitive tax regime and regulatory guesswork.” The model law aims to turn India into a destination of choice rather than a “regulatory minefield” through rights-first certainty, innovation-safe harbors, and calibrated oversight.

The model law also proposes the creation of a strategic Bitcoin (BTC) reserve for the country. The COINS Act would turn legally seized crypto assets into a reserve overseen by the parliament. The reserve should be seeded and topped up by confiscated assets and modest market buys. This follows a recent call from an Indian politician for the country to explore a Bitcoin reserve pilot. On June 26, Pradeep Bhandari, spokesperson for India’s ruling BJP party, called for regulatory clarity and a Bitcoin reserve pilot to strengthen the country’s economic resilience. Hashed Emergent plans to co-host an event with the Bharat Web3 Association to compare the COINS Act with an upcoming model regulations and the Department of Economic Affairs’ (DEA) discussion paper. In parallel, Black Dot aims to hold workshops with the Ministry of Finance, Securities and Exchange Board of India, and Reserve Bank of India to present the model’s concepts for further discussion. The approach aligns with crypto’s “strength in numbers” ethos, taking inspiration from the Bitcoin white paper. Community collaboration, rather than back-room deals, will push the model law forward to policymakers.