India’s VDA Governance: Leading the Way
Bridging the Gap: Why India Needs a Proactive Parliament for Digital Asset Regulation
while the United States Senate recently passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signaling a proactive legislative approach to emerging technologies, India finds itself lagging in formal discourse on Virtual Digital Assets (VDAs). The current Indian framework is largely confined to Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) oversight, a stringent taxation regime, and plans to collect and exchange VDA transaction data via the Crypto-Asset Reporting Framework (CARF). This limited engagement highlights a significant gap in India’s governance architecture,particularly concerning Parliament’s interaction with VDAs and blockchain innovations.
The statistics paint a stark picture. Between 2021 and 2025, a mere 0.063% of questions posed in the Lok Sabha, and 0.08% of those in the Rajya Sabha (2021-2024), addressed cryptoassets, cryptocurrency, or VDAs. Debates on the subject have been equally scarce,with the 17th Lok Sabha witnessing only three discussions – two through Zero Hour speeches and one Special Mention. The ongoing 18th session has yet to see any. Despite an expressed intent in 2021 to develop a legislative framework for cryptoassets, that initiative has not materialized.The much-anticipated Discussion Paper (DP) on VDAs, announced for release in July 2024, represents a crucial first step. Though, nearly a year as its announcement, the paper remains elusive. Its timely release, coupled with active engagement from a well-informed Parliament, is vital for advancing India’s vision in the digital asset space.
A significant challenge lies in the limited capacity of Members of Parliament (MPs) to navigate the complexities of digital innovation. With only a handful equipped to understand the nuances of VDAs, there is an urgent need to build institutional capacity for informed legislative engagement. The Honourable Lok Sabha Speaker’s recent emphasis on the importance of appropriate regulatory systems, data privacy, and equitable tech access across national parliaments underscores this urgency.
The multifaceted nature of VDAs, encompassing taxation, financial markets, security, privacy, and global compliance, necessitates robust and sustained parliamentary dialogue. To foster this, improving MP awareness through briefing sessions, committee consultations, and cross-party engagement is paramount.
India’s ambitious ‘Viksit Bharat’ vision for 2047, aiming for inclusive growth and leadership in digital public infrastructure and sunrise sectors like AI and fintech, critically depends on its ability to embrace and regulate emerging technologies. As vdas increasingly integrate into the financial landscape, the forthcoming Discussion Paper offers a timely opportunity to establish a clear, forward-looking regulatory path. However, translating this opportunity into tangible progress requires more than just policy intent; it demands a proactive, informed, and engaged Parliament.
A strong legislative foundation, built on thorough debate and cross-party collaboration, will be indispensable for India to not only keep pace with global developments but also to lead in shaping the future of digital finance and technology governance.
(R Venkatesh is Head of Public Policy at CoinSwitch, Saurya Mishra, LAMP Fellow, PRS Legislative Research and Monya is Senior Public Policy Analyst at CoinSwitch)