As US takes lead, India may move to regulate cryptocurrency: Experts

The price of Bitcoin rallied to $95,083 per piece on Sunday from $78,225 on Friday following Trump's announcement. It normalised to $83,687 on Tuesday at the time of writing this report

US President Donald Trump’s announcement of a strategic cryptocurrency reserve has kindled a hope in Indian crypto space too as experts believe that it could shore up the legitimacy of virtual digital assets (VDAs) in the country too.

 

Industry experts suggested that it would potentially strengthen the case for the country to consider integrating crypto into its reserves.

 

Last week, Trump said that five VDAs including Bitcoin, Ether, XRP, Solana and Cardano were expected to be included into a new US strategic reserve for cryptocurrencies.

 

Crypto experts believe that such an announcement from a leading crypto-adopting nation could encourage other countries, including India, to incorporate crypto into their reserves and push for clearer VDA regulations.

 

“Trump’s announcement on the US Crypto Reserve has changed the investor sentiment in the market globally. This sentiment change was also among Indian investors, with most exchanges seeing an uptick in trading volumes. This move could lead to global adoption, with other countries integrating crypto into their reserves,” said Edul Patel, co-founder and chief executive officer (CEO), Mudrex, a crypto company in India.

 

The price of bitcoin rallied to $95,083 per piece on Sunday from $78,225 on Friday following Trump’s announcement. It normalised to $82,812 on Tuesday at the time of writing this report.

 

At present, India does not have a regulatory framework overseeing the cryptocurrency market. The Reserve Bank of India (RBI) maintains that cryptocurrencies pose risks to financial and monetary stability.

 

“For India, where crypto adoption is already among the highest globally, these moves might encourage policymakers to reassess their stance. The absence of clear regulations has driven investors toward non-compliant exchanges, increasing their exposure to risks and scams,” said Sumit Gupta, co-founder, CoinDCX; a cryptocurrency exchange.

 

Despite the absence of clear operational guidelines, Indian firms are setting up baseline requirements involving user protection processes, including a redressal mechanism, fraud detection, regular filing of suspicious transaction reports (STRs), among others.  

 

“With the US spearheading the creation of a Strategic Crypto Reserve, we could be on the brink of a global accumulation race, one that could push regulatory clarity forward, and accelerate Web3 innovation,” said Ashish Singhal, co-founder, CoinSwitch, a cryptocurrency exchange in India.

 

Patel from Mudrex added that countries like Vietnam announced a legal framework draft for cryptocurrencies after Trump made his announcement on crypto reserves. As countries follow suit, a suitable framework for regulating crypto in India based on global standards could possibly emerge.

 

“More such reserves will eventually change the way crypto is perceived, increasing the legitimacy of the asset,” he said.