India introduced a draft bill concept for comprehensive regulation of the crypto market, proposing the creation of a specialized regulator, legal protection for non-custodial asset storage, various temporary relief measures, and the establishment of a strategic Bitcoin reserve.
Hashed Emergent and Black Dot presented the Crypto-systems Oversight, Innovation and Strategy Act (COINS Act), a bill aimed at establishing progressive crypto regulation in India.
The COINS Act enshrines four fundamental rights for participants in the cryptocurrency industry, namely:
- The right to use non-custodial solutions.
- The right to interact with cryptocurrency protocols without intermediaries.
- The right to deploy code and implement innovations.
- The right to privacy and anonymity without mandatory KYC in Peer-to-Peer and Peer-to-Protocol transactions.
Moreover, the COINS Act prohibits punitive taxation on crypto-asset transactions and allows mandatory user identification only when interacting with registered service providers.
The bill also provides for the creation of a new regulatory body, the Crypto Assets Regulatory Authority (CARA). The authority will include three judicial representatives and two technical experts with at least seven years of experience in crypto and digital technologies. The regulator will differentiate companies by risk level:
- strict oversight will apply to services with custodial functions, such as centralized exchanges;
- minimal disclosure regimes will cover non-custodial but insufficiently decentralized protocols;
- fully decentralized protocols will be exempt from regulation.
The COINS Act proposes several temporary relief measures, including:
- a two-year grace period for compliance with rules during initial coin offering (ICO) under a simplified disclosure regime;
- exemption of developers from liability for third-party actions, provided there is no malicious intent;
- exclusion from the scope of India’s Foreign Exchange Management Act (FEMA) for two years to remove legal uncertainty and support cross-border operations.
The bill also mandates the creation within one year of two government cryptocurrency reserves:
- Strategic Bitcoin Reserve, a storage of all state-owned BTC.
- Strategic Crypto-assets Reserve, a fund based on decentralized infrastructure crypto-assets.
These reserves will be replenished from confiscated assets and other lawful sources and used only by court order or to return assets to victims. An annual public report on the reserves will be published.
Max Krupyshev, CEO of CoinsPaid, previously expressed the view that in 2025 interest in Bitcoin as a tool to diversify government reserves and reduce dependence on traditional financial assets will continue to grow. He emphasized the growing importance of legal certainty in crypto-asset regulation.
The COINS Act is based on the principles of technological neutrality, proportionality, transparency, and maximization of individual sovereignty. It requires public consultations and cost-benefit analyses before enacting any subordinate legislation and protects cryptocurrency rights from arbitrary restrictions by the state without Supreme Court approval.
According to the Bank for International Settlements report, India became one of the key crypto hubs in 2024 despite lacking a transparent regulatory framework for digital assets.
