‘Taxed like they’re legal, regulated like they’re illegal’: Raghav Chadha says crypto, stablecoin must be legalised
Raghav Chadha said there is no dedicated licencing law, no investor protection, no dedicated anti-money laundering (AML) framework, and no explicit legal classification for virtual digital assets.
- Feb 10, 2026,
- Updated Feb 10, 2026 11:43 AM IST
Why are virtual digital assets like cryptocurrency or stablecoin taxed like legal assets but regulated like they are illegal, questioned AAP Rajya Sabha in the Parliament. He suggested that the digital assets must be regulated and the investments that are not moving offshore should be brought back into the country.
“Legalise virtual digital assets like an asset class,” said Chadha, adding that cryptocurrency is taxed at 30 per cent for capital gains and 1 per cent for TDS, but somehow is not recognised as an asset class.
He said this has led to a major gap, leading to no dedicated licencing law, no investor protection, no dedicated anti-money laundering (AML) framework, and no explicit legal classification.
This gap in regulation and taxation has led to Rs 4.8 lakh crore of VDA trading to move offshore, and 73 per cent of the trading volume in India to move to foreign exchanges. He added that 180 Indian crypto startups have relocated abroad, and 12 crore Indians now invest via overseas platforms.
There is a simple answer to this, said Chadha. Ensure compliance in India and heavily regulate it, he said. It is pertinent to bring it onshore, said the MP.
“A clear domestic regulatory sandbox, with strong AML guardrails can bring activity back onshore, protect investors, improve compliance and add Rs 15,000–20,000 crore in annual tax revenue,” said Chadha.
“We currently tax these virtual digital assets as if they are legal but we regulate them as if they are illegal. My suggestion is that we need to heavily regulate it, ringfence the ecosystem, and strengthen the AML guidelines. Prohibition is not protection, regulation is protection,” said Chadha.
Separately, Chadha also urged the government to abolish long-term capital gains (LTCG) tax for individual investors in the equity market. He argued that it would boost household wealth and channel savings from gold and real estate into other productive assets. Chadha cited global examples of Switzerland, Singapore, the UAE, Hong Kong, New Zealand, Qatar and Malaysia, where long-term equity gains are largely tax-free. "Long Term Capital Gains Tax on equities should be made nil in this country for individual investors... I would like the LTCG to be zero when STT is being raised," the AAP member said.
Why are virtual digital assets like cryptocurrency or stablecoin taxed like legal assets but regulated like they are illegal, questioned AAP Rajya Sabha in the Parliament. He suggested that the digital assets must be regulated and the investments that are not moving offshore should be brought back into the country.
“Legalise virtual digital assets like an asset class,” said Chadha, adding that cryptocurrency is taxed at 30 per cent for capital gains and 1 per cent for TDS, but somehow is not recognised as an asset class.
He said this has led to a major gap, leading to no dedicated licencing law, no investor protection, no dedicated anti-money laundering (AML) framework, and no explicit legal classification.
This gap in regulation and taxation has led to Rs 4.8 lakh crore of VDA trading to move offshore, and 73 per cent of the trading volume in India to move to foreign exchanges. He added that 180 Indian crypto startups have relocated abroad, and 12 crore Indians now invest via overseas platforms.
There is a simple answer to this, said Chadha. Ensure compliance in India and heavily regulate it, he said. It is pertinent to bring it onshore, said the MP.
“A clear domestic regulatory sandbox, with strong AML guardrails can bring activity back onshore, protect investors, improve compliance and add Rs 15,000–20,000 crore in annual tax revenue,” said Chadha.
“We currently tax these virtual digital assets as if they are legal but we regulate them as if they are illegal. My suggestion is that we need to heavily regulate it, ringfence the ecosystem, and strengthen the AML guidelines. Prohibition is not protection, regulation is protection,” said Chadha.
Separately, Chadha also urged the government to abolish long-term capital gains (LTCG) tax for individual investors in the equity market. He argued that it would boost household wealth and channel savings from gold and real estate into other productive assets. Chadha cited global examples of Switzerland, Singapore, the UAE, Hong Kong, New Zealand, Qatar and Malaysia, where long-term equity gains are largely tax-free. "Long Term Capital Gains Tax on equities should be made nil in this country for individual investors... I would like the LTCG to be zero when STT is being raised," the AAP member said.