COINS Act model law offers blueprint for crypto regulation in India

Web3 venture firm Hashed Emergent and policy advisory group Black Dot have released a model crypto law aimed at clarifying India’s regulatory framework around digital assets.

Announced Monday, the Crypto-systems Oversight, Innovation and Strategy (COINS) Act offers 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

Still, the framework 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, and 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.

COINS Act model law spurred by India’s regulatory uncertainty

Hashed Emergent legal counsel, Arvind Alexander, who contributed to the creation of the model law, told Cointelegraph that regulatory uncertainty in India drove the creation of the COINS Act. He said there are much-delayed, after-the-fact advisories, but no clear principled laws

Alexander told Cointelegraph that builders and users lacked express legal rights to self-custody, privacy and permissionless protocol access. At the same time, they are 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

“We therefore flipped the policy script,” Alexander told Cointelegraph. “COINS Act starts by enshrining fundamental crypto rights as extensions of India’s Constitution, making them inviolable.”

He said 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,” Alexander added

Model law tackles developer exodus and proposes Bitcoin reserve

Hashed Emergent’s senior legal counsel, Vishal Achanta, who also contributed to COINS Act, told Cointelegraph 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.”

Achanta said the model law provides a solution to “actively reverse the offshoring phenomenon.”

He told Cointelegraph that it aims to turn India into a destination of choice rather than a “regulatory minefield.” He said this can be done through rights-first certainty, innovation-safe harbors and calibrated oversight

In addition, the model law also proposes the creation of a strategic Bitcoin (BTC) reserve for the country. Achanta told Cointelegraph that the COINS Act would turn legally seized crypto assets into a reserve overseen by the parliament.

The model law also suggests that 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

Related: Reserve Bank of India to roll out new use cases for digital rupee

COINS Act creators to push adoption through workshops

Alexander told Cointelegraph that 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.

Cointelegraph reached out to the Indian Ministry of Finance, the Reserve Bank of India and the Securities and Exchange Board of India for comments but did not receive a response by publication

Alexander also told Cointelegraph that their approach aligns with crypto’s “strength in numbers” ethos, taking inspiration from the Bitcoin white paper. He said community collaboration, rather than back-room deals, will push the model law forward to policymakers

His comments echoed a statement by crypto advocate Sujal Jethwani, who recently told Cointelegraph that India’s crypto users will eventually force the government to adopt favorable policies.

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