India will overhaul the entire VDA framework to create safer and clearer crypto rules for millions of users.
Despite regulatory uncertainty, crypto trading is making a strong comeback with India recording a trading volume of $300 billion.
The RBI has warned that easing crypto regulations could increase financial stability risks for the Indian economy as a whole.
India, home to more than 100 million cryptocurrency users, is currently rethinking how it regulates digital assets. The government is planning an overhaul of virtual digital asset (VDA) rules, covering licensing, user protection, taxes and more.
The review has raised expectations among investors, exchanges and builders who have been waiting for clarity.
Indian crypto market shows stability
Despite strict taxes and unclear regulations, the volume of cryptocurrency trading in India is staggering. From July 2024 to June 2025, India’s trading volume once again increased to $300 billion, proving that Indian users have not left the exchange despite the Wazirx hack in July 2024, which drained around $230 million from the exchange.
This recovery suggests that cryptocurrencies in India are not on the decline. Rather, the situation is stabilizing as more people learn, participate, and seek long-term opportunities.
Therefore, the Indian government is currently reviewing the entire framework.
Government begins review of entire VDA rulebook
The most important current development is the government’s decision to review and restructure the entire VDA framework. It includes several key improvements that industry stakeholders have been requesting for years.
- Enhance protection for users and their assets
- Clear licensing rules for exchanges and custodians
- Full transparency regarding reserves, custody and insolvency
- Monitoring stablecoins and tokenized real-world assets
- Stringent 30% tax and 1% TDS revaluation
- Stronger reporting systems and better market oversight.
Officials say there is no clear timeline for developing a complete regulatory framework. Indian authorities argue that VDA rules need to be harmonized internationally to avoid regulatory loopholes.
Key points for the growth of cryptocurrencies in India
This review suggests that India may finally be moving towards a stable and mature crypto environment.
For everyday investors, clearer rules mean a safer platform, less risk, and a better crypto experience. And for businesses, a structured rulebook can unlock innovation that has been held back by uncertainty.
Despite this, the Reserve Bank of India (RBI) continues to express concerns. It warns that financial stability could be threatened if cryptocurrencies gain too much legitimacy through regulation.
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