Crypto players second Raghav Chadha's call for strong crypto regulations, legal status
Raghav Chadha, the AAP MP in Rajya Sabha, has urged the government to legalize virtual digital assets, which includes the likes of cryptocurrencies and stablecoins.
- Feb 11, 2026,
- Updated Feb 11, 2026 2:35 PM IST
Raghav Chadha, the member of Parliament (MP) from Aam Aadmi Party (AAP) in Rajya Sabha, has urged the government to legalize virtual digital assets (VDAs), which includes the likes of cryptocurrencies and stablecoins, pointing that the move could add up to Rs 15,000-20,000 revenue to the exchequer.
He said the absence of a clear framework is pushing Indian investors and web 3.0 startups operations offshore. "India taxes VDAs like they are legal, but regulates it like they are illegal," the AAP MP said during budget discussion in the upper house. "Let us not fear innovation, let us regulate it. Prohibition is not protection, Regulation is protection."
Chadha said around 12 crore Indians are now using overseas platforms for crypto trading, with Rs 4.8 lakh crore in VDA having moved offshore, while highlighting the cost of regulatory uncertainty. He flagged the need for compliance in India and seeked a clear asset class status for VDAs in India.
He added that 73 per cent of India's crypto trading volume has shifted to foreign exchange, and nearly 180 Indian crypto startups have relocated overseas to countries like Dubai, Singapore and Malaysia. He also said tha clear regulatory guidelines with strong AML guardrails would encourage VDA activity to return to India.
One should note, as the AAP leader highlighted, that the government taxes crypto at 30 per cent capital gains rate and levies 1 per cent TDS on transactions. He pointed out that it offers no legal recognition, no investor protection, and no dedicated anti-money laundering (AML) framework. Crypto industry has been voicing strongly for a clear regulatory framework in India.
A calibrated policy approach grounded in clarity, fairness, and global competitiveness would not only retain capital and talent but also position India as a global leader in the next chapter of financial innovation, said Edul Patel, CEO, Mudrex. A balanced, forward-looking VDA framework for India should combine legal recognition, proportional taxation, and strong oversight, he said.
"An innovation-friendly regulatory sandbox will allow new digital asset products, tokenisation of real-world assets, stablecoin use cases and Web3 models to be tested under supervision and ensure India doesn’t just regulate crypto but plays an active role in shaping the future of digital finance," Patel added.
There is a growing recognition that virtual digital assets should be governed rather than sidelined. The emphasis on AML ring-fencing and stricter oversight reflects an understanding that risk management and innovation can coexist when the rules are clear and consistently applied, said Avinash Shekhar, Co-founder, and CEO at Pi42.
The push to bring Indian participation back onshore also highlights a significant gap—capital, talent, and trading activity already exist but are operating outside the domestic system. A predictable regulatory and tax framework can redirect this activity into India, improve transparency, and strengthen market integrity, he said.
How Crypto market is faring
Crypto market has been hammered hard lately on the back of selling pressure in the AI stock and institutional outflows. The crypto market has lost more than $2.2 trillion market capitalization in the four months, from its peak around $4.38 trillion in October 2026.
Bitcoin, the oldest and largest crypto asset, was underpinned at $67,000 on Wednesday, down nearly 3 per cent in the last 24 hours. It has crumbled nearly 47 per cent from its peak at $1,26,080, suggest data from Coingecko. It is currently commanding a market capitalization close to $1.34 trillion
The recent drop in crypto markets is mainly due to short-term macro factors and positioning, Expectations of faster and deeper Federal Reserve rate cuts had supported risk assets, but growing uncertainty around the timing and scale of policy easing has tightened liquidity outlooks, prompting investors to rotate toward traditional safe-haven assets said Vikas Gupta, Country Manager- India at Bybit.
"Profit-taking by traders and institutions following the recent rally has also contributed to the correction. With thinner market depth and reduced participation in certain sessions, even modest capital flows have caused significant volatility, reflecting sentiment-driven dynamics rather than structural weakness," he said.
Raghav Chadha, the member of Parliament (MP) from Aam Aadmi Party (AAP) in Rajya Sabha, has urged the government to legalize virtual digital assets (VDAs), which includes the likes of cryptocurrencies and stablecoins, pointing that the move could add up to Rs 15,000-20,000 revenue to the exchequer.
He said the absence of a clear framework is pushing Indian investors and web 3.0 startups operations offshore. "India taxes VDAs like they are legal, but regulates it like they are illegal," the AAP MP said during budget discussion in the upper house. "Let us not fear innovation, let us regulate it. Prohibition is not protection, Regulation is protection."
Chadha said around 12 crore Indians are now using overseas platforms for crypto trading, with Rs 4.8 lakh crore in VDA having moved offshore, while highlighting the cost of regulatory uncertainty. He flagged the need for compliance in India and seeked a clear asset class status for VDAs in India.
He added that 73 per cent of India's crypto trading volume has shifted to foreign exchange, and nearly 180 Indian crypto startups have relocated overseas to countries like Dubai, Singapore and Malaysia. He also said tha clear regulatory guidelines with strong AML guardrails would encourage VDA activity to return to India.
One should note, as the AAP leader highlighted, that the government taxes crypto at 30 per cent capital gains rate and levies 1 per cent TDS on transactions. He pointed out that it offers no legal recognition, no investor protection, and no dedicated anti-money laundering (AML) framework. Crypto industry has been voicing strongly for a clear regulatory framework in India.
A calibrated policy approach grounded in clarity, fairness, and global competitiveness would not only retain capital and talent but also position India as a global leader in the next chapter of financial innovation, said Edul Patel, CEO, Mudrex. A balanced, forward-looking VDA framework for India should combine legal recognition, proportional taxation, and strong oversight, he said.
"An innovation-friendly regulatory sandbox will allow new digital asset products, tokenisation of real-world assets, stablecoin use cases and Web3 models to be tested under supervision and ensure India doesn’t just regulate crypto but plays an active role in shaping the future of digital finance," Patel added.
There is a growing recognition that virtual digital assets should be governed rather than sidelined. The emphasis on AML ring-fencing and stricter oversight reflects an understanding that risk management and innovation can coexist when the rules are clear and consistently applied, said Avinash Shekhar, Co-founder, and CEO at Pi42.
The push to bring Indian participation back onshore also highlights a significant gap—capital, talent, and trading activity already exist but are operating outside the domestic system. A predictable regulatory and tax framework can redirect this activity into India, improve transparency, and strengthen market integrity, he said.
How Crypto market is faring
Crypto market has been hammered hard lately on the back of selling pressure in the AI stock and institutional outflows. The crypto market has lost more than $2.2 trillion market capitalization in the four months, from its peak around $4.38 trillion in October 2026.
Bitcoin, the oldest and largest crypto asset, was underpinned at $67,000 on Wednesday, down nearly 3 per cent in the last 24 hours. It has crumbled nearly 47 per cent from its peak at $1,26,080, suggest data from Coingecko. It is currently commanding a market capitalization close to $1.34 trillion
The recent drop in crypto markets is mainly due to short-term macro factors and positioning, Expectations of faster and deeper Federal Reserve rate cuts had supported risk assets, but growing uncertainty around the timing and scale of policy easing has tightened liquidity outlooks, prompting investors to rotate toward traditional safe-haven assets said Vikas Gupta, Country Manager- India at Bybit.
"Profit-taking by traders and institutions following the recent rally has also contributed to the correction. With thinner market depth and reduced participation in certain sessions, even modest capital flows have caused significant volatility, reflecting sentiment-driven dynamics rather than structural weakness," he said.