Bitcoin News Today: India's Crypto Regulatory Framework Proposed by Hashed Emergent and Black Dot

The Crypto-systems Oversight, Innovation and Strategy (COINS) Act, a model law aimed at providing a clear regulatory framework for digital assets in India, has been released by Web3 venture firm Hashed Emergent and policy advisory group Black Dot. The non-binding framework is designed to support a clearer, industry-led policy environment for crypto in India. It addresses key legal pain points such as punitive taxation, regulatory uncertainty, and the absence of a dedicated crypto regulator.

The model law recommends the establishment of a new regulatory body, 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.

Arvind Alexander, legal counsel for Hashed Emergent, highlighted that regulatory uncertainty in India was the driving force behind the creation of the COINS Act. He noted that there are 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. Additionally, the country applies a 1% tax deducted at source (TDS) to all transactions over $115, deducting it from either the buyer or the seller. The COINS Act aims to address these issues 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 profiles. Centralized exchanges face full licensing requirements, non-custodial protocols are subject to a simple disclosure regime, and truly permissionless protocols are fully exempt from compliance.

Vishal Achanta, senior legal counsel for Hashed Emergent, noted that 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 reverse this trend by providing rights-first certainty, innovation-safe harbors, and calibrated oversight, turning India into a destination of choice rather than a “regulatory minefield.”

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, 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.

Hashed Emergent plans to co-host an event with the Bharat Web3 Association to compare the COINS Act with upcoming model regulations and the Department of Economic Affairs’ (DEA) discussion paper. 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.

Alexander emphasized that their 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. This aligns with the views of crypto advocate Sujal Jethwani, who recently stated that India’s crypto users will eventually force the government to adopt favorable policies.