News, data and analysis on tokenized assets, market design and digital economic systems.
Virtual digital assets are taxed at 30% and exchanges must register for anti-money-laundering purposes, but there is no licensing law: a parliamentary committee is studying the question and the Reserve Bank has argued for ring-fencing or prohibition.
India taxes virtual digital assets heavily (30% on gains with no loss set-off and 1% tax deducted at source on transfers) and requires exchanges and custodians to register with the Financial Intelligence Unit under the Prevention of Money Laundering Act, but it has deliberately avoided a comprehensive licensing law. The Parliamentary Standing Committee on Finance, chaired by Bhartruhari Mahtab, took up a study titled 'A Study on Virtual Digital Assets (VDAs) and Way Forward' with a report expected in the 2026 monsoon session; the Reserve Bank of India testified in early July 2026 in favour of ring-fencing or prohibition, and a Department of Economic Affairs hearing was scheduled for July 15, 2026. The RBI continues to warn that dollar-referenced stablecoin adoption would erode monetary sovereignty and promotes the digital rupee instead.
| Framework | Status | Date | Note |
|---|---|---|---|
| Finance Act 2022: taxation of virtual digital assets (Sections 115BBH and 194S) | In force | 1 April 2022 | 30% tax on VDA gains with no deduction for expenses other than cost of acquisition and no loss set-off; 1% tax deducted at source on transfers from July 1, 2022. |
| PMLA notification designating VDA activities as reporting entities | In force | 7 March 2023 | Requires exchanges, custodians and wallet providers serving Indian users to register with FIU-IND and comply with KYC, record-keeping and reporting duties. |
| FIU-IND enforcement against offshore VDA platforms | In force | 28 December 2023 | Compliance show-cause notices and URL blocking against unregistered offshore exchanges, with several subsequently registering. |
| Parliamentary Standing Committee on Finance study on virtual digital assets | Consultation | 1 July 2026 | 'A Study on Virtual Digital Assets (VDAs) and Way Forward' under chair Bhartruhari Mahtab, with a report expected in the 2026 monsoon session; RBI testified in early July 2026 favouring ring-fencing or prohibition and a Department of Economic Affairs hearing was set for July 15, 2026. |
| Digital rupee (e-rupee) central bank digital currency pilots | In force | 1 November 2022 | Wholesale pilot from November 1, 2022 and retail pilot from December 1, 2022, extended to programmable and offline use cases. |
| SEBI regulation of tokenized securities | Proposed | 1 January 2025 | No dedicated tokenization framework; securities issued in tokenized form remain subject to existing depository and dematerialisation requirements. |
Every development we have evidenced under India, newest first.
SEBI and the Reserve Bank announced Demat 2.0 at the Global Fintech Fest. Three issuers had raised Rs 1,025 crore in bonds created as native tokens on a ledger owned by the depositories, with the funds leg settled atomically in wholesale CBDC. The depository remains the authoritative record of ownership and holds investors' private keys.
The Reserve Bank of India launched the first pilot of the wholesale central bank digital rupee, using it to settle secondary-market transactions in government securities. Nine banks were identified for participation, and the stated aim was to cut interbank settlement costs by removing the need for settlement guarantee infrastructure.
In circular DBR.No.BP.BC.104/08.13.102/2017-18 the Reserve Bank of India directed that entities it regulates "shall not deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs", covering account maintenance, clearing, lending against tokens and transfers connected to virtual currency purchases. Institutions already providing such services were given three months, to 6 July 2018, to exit those relationships.
Three issuers have raised Rs 1,025 crore, about $107m, in bonds issued as native tokens on a ledger owned by India's depositories, with the cash leg settled in wholesale CBDC. SEBI claims a world first and the claim is narrowly drawn.
What issued, what settled, what the supervisors changed, with the numbers behind it and a note on what the numbers do not show. One email, Thursday mornings.
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