India Is Already Using Crypto and Now the Pressure to Legalize It Is Exploding
Why Raghav Chadha Is Renewing Calls for Clear Crypto Regulation in India
Is India’s long-uncertain stance on cryptocurrency finally beginning to shift? The question has returned to the national spotlight after Raghav Chadha, a Member of Parliament from the Aam Aadmi Party, urged the government to formally recognize cryptocurrencies as a legitimate asset class.
Speaking in the Rajya Sabha on February 9, 2026, Chadha challenged the country’s current approach, arguing that India cannot continue to tax digital assets aggressively while refusing to provide a clear legal framework. His remarks have reignited debate over whether India is prepared to move beyond ambiguity and toward structured regulation at a time when crypto adoption in the country is among the highest in the world.
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| Source: Bitnning Official |
A Renewed Push at a Critical Moment
Chadha’s intervention comes as India’s digital asset ecosystem reaches new levels of participation. Estimates suggest that more than 120 million Indians have engaged with cryptocurrencies in some form, placing the country among the largest crypto user bases globally. Despite this scale, India still lacks a comprehensive law governing digital assets, exchanges, custody, or investor protection.
Instead, the sector operates under a patchwork of tax rules and enforcement measures. Profits from crypto transactions are taxed at 30 percent, while a 1 percent tax deducted at source is applied to every trade. Yet there is no licensing regime, no standardized compliance framework, and limited clarity on how exchanges or investors should operate within the law.
Chadha described this imbalance as unsustainable, arguing that India is effectively acknowledging crypto activity through taxation while denying it legal recognition.
What Raghav Chadha Is Asking For
In his speech, Chadha called on the government to formally recognize cryptocurrencies and other Virtual Digital Assets as an asset class. Such recognition, he argued, would allow India to introduce proper licensing, compliance standards, and investor safeguards rather than relying solely on punitive taxation.
He highlighted what he sees as a central contradiction in policy. Indian investors are taxed as if crypto were a mature and regulated market, yet they operate without clear protections against fraud, money laundering, or platform failures. According to Chadha, this gap exposes investors to unnecessary risk while also limiting the government’s ability to supervise the sector effectively.
He also pointed to the economic consequences of regulatory uncertainty. Citing industry estimates, Chadha said that more than ₹4.8 lakh crore in digital asset trading volume has migrated to offshore platforms. This shift, he warned, represents not only a loss of domestic capital but also a loss of data, innovation, and potential tax revenue for India.
Framing Crypto as the Next “UPI Moment”
One of the most striking elements of Chadha’s argument was his comparison of blockchain reform to India’s Unified Payments Interface. He described UPI as a transformative moment that democratized digital payments, enabling participation across income levels and regions.
In a similar vein, Chadha suggested that cryptocurrencies and tokenized assets could broaden access to investment opportunities, particularly for the middle class. At present, many Indian households rely heavily on low-yield instruments such as savings accounts, fixed deposits, or traditional mutual funds. Blockchain-based systems, he argued, could introduce new ways to participate in asset ownership and wealth creation.
Tokenization at the Core of the Proposal
Chadha’s remarks are consistent with his earlier advocacy for a so-called Tokenization Bill, first outlined in December 2025. The concept centers on using blockchain technology to divide high-value assets into smaller digital units, making them accessible to a wider pool of investors.
Under this model, assets such as real estate, infrastructure projects, commodities, or intellectual property could be tokenized. Investors would be able to purchase fractional ownership, potentially earning returns through rental income, revenue sharing, or asset appreciation.
Supporters of tokenization argue that it could improve liquidity, reduce administrative overhead, and lower entry barriers, while operating under clear legal safeguards. Chadha emphasized that such a system would require strict regulation, transparency, and oversight, rather than an unregulated free-for-all.
A Broader Political Conversation
Chadha is not the only political figure to raise questions about India’s crypto policy. Over the past two years, voices across the political spectrum have acknowledged the need for greater clarity.
Pradeep Bhandari has publicly called for regulation of stablecoins and has even suggested exploring the idea of a strategic Bitcoin reserve. Meanwhile, Finance Minister Nirmala Sitharaman has acknowledged global developments and stated that India is open to international consensus on regulation rather than outright bans.
At the G20 level, Sitharaman has emphasized coordination and standard-setting, reflecting concerns that unilateral action may be ineffective in a borderless digital market.
Union Minister Piyush Goyal has expressed skepticism toward what he terms “unbacked cryptocurrencies” but has also acknowledged the potential of blockchain technology itself, particularly in supply chains and digital infrastructure.
Industry Voices and Market Reality
Outside government, industry leaders continue to press for reform. Executives such as Sumit Gupta and Nischal Shetty have repeatedly called for rational taxation, improved banking access, and regulatory sandboxes that allow innovation under supervision.
Their argument is rooted in market reality. With tens of millions of users already participating, the crypto ecosystem in India is no longer speculative or marginal. Prolonged uncertainty, they warn, risks pushing talent and capital abroad while leaving domestic users exposed.
Persistent Barriers to Change
Despite growing advocacy, significant obstacles remain. The Union Budget for 2026–27 did not introduce any relief for the crypto sector. Tax rates remained unchanged, and no provisions were made for loss set-off or carry-forward. Instead, the government tightened penalties for reporting failures, reinforcing an enforcement-first approach.
The Reserve Bank of India continues to caution against private cryptocurrencies, citing concerns about financial stability, capital flight, and illicit activity. The central bank has consistently promoted the RBI-backed digital rupee as a safer alternative, signaling a preference for state-controlled digital currency over decentralized assets.
This divergence between fiscal policy, regulatory caution, and market participation has left India’s crypto policy in a state of limbo.
What Comes Next
For now, India’s crypto landscape remains defined by debate rather than decisive action. Chadha’s speech has added momentum to calls for reform, but resistance from regulators and the absence of legislative change suggest that full legalization is unlikely in the immediate term.
Still, the growing scale of participation makes indefinite avoidance difficult. As more Indians engage with digital assets and as global norms evolve, pressure is likely to increase for a framework that balances innovation, consumer protection, and financial stability.
Conclusion
Raghav Chadha’s renewed push for crypto regulation highlights a central tension in India’s approach to digital assets. The country taxes crypto heavily, yet offers little legal clarity or protection. With adoption rising and capital flowing offshore, that contradiction is becoming harder to justify.
Whether India ultimately chooses regulation, restriction, or a hybrid model remains uncertain. What is clear is that the conversation is shifting from whether crypto exists to how it should be governed. For policymakers, the challenge now is deciding whether to lead that change or continue reacting to it.
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