BS BFSI Summit: Regulate now or lose out, cryptocurrency leaders tell India

Experts at the BFSI Summit urged swift digital asset regulation and an INR-backed stablecoin to stop India's crypto talent and innovation from moving overseas

India must urgently introduce clear and comprehensive regulations for the digital asset sector, as prolonged policy uncertainty risks driving innovation and talent abroad, said top cryptocurrency industry leaders and policymakers at the Business Standard BFSI Insight Summit 2025 in Mumbai. 

During a panel discussion titled ‘India’s Crypto Crossroads: Time for a Policy Rethink?’ moderated by Shivani Shinde of Business Standard, panellists also called on India to take the lead in developing a rupee-backed stablecoin. 

Speaking at the session, Dilip Chenoy, chairman of Bharat Web3 Association (BWA), said: “India has a $1.1 trillion opportunity by 2032 in this space. Given that India took leadership in the G20 to push for global regulation — and we now have a kind of blueprint — it’s ironic that 18 G20 nations have some form of regulation, and India doesn’t. It’s time we all came together to create one. It’s not that difficult.” 

 

Sumit Gupta, cofounder and chief executive officer of CoinDCX, added: “It’s high time we looked at regulations. The best time to regulate was yesterday; the next best is today. If we don’t act now, we’ll lose out. It’s a big risk if we fail to innovate in this sector.” 

G Padmanabhan, former executive director of the Reserve Bank of India (RBI), said the financial sector is inevitably moving towards digitisation and tokenisation, making regulation essential. “The future of finance is digital. The future of finance is tokenisation,” he said. Padmanabhan also noted that while India may have missed its early opportunity in crypto, it cannot afford to ignore stablecoins. “Among International Monetary Fund member countries, nearly 70 per cent are already working on some form of regulation for stablecoins. They believe stablecoin growth will outpace that of crypto,” he said. 

S B Seker, head of Asia-Pacific at Binance, said the absence of clear regulation has kept digital assets from becoming a national focus. “India has been a standout leader in digital asset adoption over the past four years. But the country needs to decide its model — there are plenty of global examples to follow,” he said.

 

When asked whether the sector needs a separate regulatory body, panellists were divided. Seker said outcomes mattered more than structure: “There are two models — Dubai created a separate regulator, while others integrated it into existing systems. As long as there’s a constitutional mandate, a new body isn’t necessary.”

 

Padmanabhan agreed: “Having a separate regulator won’t solve everything. What matters is having the right people with the right attitude to let innovation thrive until issues arise.”

 

While the “crypto bus” may have left the station, the panellists agreed that India cannot delay its stance on stablecoins.

 

Chenoy said one of the RBI’s biggest concerns — dollarisation — could be mitigated by a rupee-backed stablecoin. “If you want to address that, look at what the Brics nations did — they created a trade settlement mechanism based on virtual digital assets not linked to the dollar. India didn’t participate. Since we’re the world’s largest remittance market, a rupee-backed stablecoin could cut remittance costs,” he said.

 

Padmanabhan added that from a monetary policy standpoint, India must study stablecoins closely.

 

“As we speak, around 97 per cent of stablecoins are linked to the US dollar. If that continues, two things could happen: the dollar becomes even more dominant, and our monetary policy weakens,” he warned.

 

Highlighting that global stablecoin circulation could reach $2 trillion by 2030, Gupta said:

 

“If we don’t act now, others will internationalise their currencies while India lags. We need to internationalise the rupee.”

 

Seker added: “As digital dollars become programmable and interoperable, their global influence will grow. India must make the rupee digitally available to stay competitive.”

 

When it comes to crypto, India faces a peculiar problem: while crypto itself lacks regulatory support, associated technologies like blockchain and Web3 are also getting sidelined.

 

Gupta said unclear rules are driving crypto entrepreneurs abroad. “Running an exchange in India has been a nightmare because of the uncertainty. Ninety per cent of my friends — talented Indian Institute of Technology graduates — have moved overseas. If we’re too late, it’ll be hard to bring that talent back.”

 

Chenoy agreed that regulatory delays are costing India both innovation and jobs. “By delaying regulation, we’re putting Indian companies at a disadvantage and pushing them to move overseas,” he said. “A recent study showed that 27 per cent of India’s largest crypto product creators have already relocated abroad.”