Why Does India Need a Crypto Regulatory Body?

Why Does India Need a Crypto Regulatory Body?

  • 18.03.2025 00:00
  • analyticsinsight.net
  • Keywords: cryptocurrency, regulatory body

India's growing cryptocurrency market requires a regulatory body to ensure stability, protect investors, and align with global standards. Without regulation, risks like volatility and fraud increase, potentially destabilizing the financial system.

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Estimated market influence

Coinbase

Coinbase

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Analyst rating: Buy

Coinbase registered with to offer crypto trading services, indicating a potential softening of India's previous reservations toward digital currencies.

Ajay Seth

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Analyst rating: N/A

Economic Affairs Secretary Ajay Seth highlighted the need for a dedicated regulatory body.

Context

Analysis of India's Need for a Crypto Regulatory Body

Current State of Cryptocurrency in India

  • Market Size: Projected revenue of $6.4 billion in 2025.
  • User Base: Estimated 107.3 million users as of 2025.
  • Global Leadership: India ranks as a global leader in cryptocurrency adoption for two consecutive years.

Recent Developments

  • Regulatory Shifts: Indian government reevaluating stance due to global trends, influenced by U.S. policy changes under President [Name].
  • Coinbase Registration: Significant move by Coinbase to register with Indian authorities, signaling potential regulatory easing.
  • Economic Affairs Secretary Statement: Highlighted the need for harmonized international crypto standards.

Imperative for a Dedicated Regulatory Body

1. Market Stability and Investor Protection

  • Fraud Prevention: Ensures clear guidelines and monitoring to prevent market manipulation and protect investors.
  • Secure Environment: Establishes frameworks to mitigate risks like volatility and fraudulent activities.

2. Alignment with Global Standards

  • Cross-Border Transactions: Facilitates effective participation in global crypto discussions and policy-making.
  • Harmonization: Ensures India's regulatory framework aligns with international norms, such as U.S. registration requirements and Japan's AML protocols.

3. Economic Growth and Innovation

  • Investment Attraction: Clear regulations can attract investments and foster blockchain technology adoption.
  • Innovation Hub: Positions India as a global hub for financial services innovation, supporting its $7 trillion economy vision.

Challenges Without Regulation

  • Market Volatility: Risks of extreme price fluctuations leading to investor losses.
  • Fraudulent Activities: Increased risk of scams compromising market integrity.
  • Financial Instability: Potential threats to the broader financial system from unregulated crypto activities.

Global Perspectives

  • U.S. Approach: Focus on exchange registration and AML protocols.
  • Japan's Model: Emphasis on investor protection and AML measures for exchanges.

Long-Term Effects and Strategic Considerations

  • Regulatory Framework: Timely implementation is crucial to harness digital asset potential while mitigating risks.
  • Competitive Dynamics: India's regulatory moves, like Coinbase's registration, align with global trends and enhance its competitive positioning in the crypto space.