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India’s long-awaited crypto regulation plans are facing another major challenge as a key parliamentary hearing was cancelled. The hearing with the Department of Economic Affairs (DEA) was originally scheduled for today to discuss the country’s approach to virtual digital assets (VDAs). Now, the hearing is cancelled, with no new date confirmed yet.
This delay adds to the uncertainty in India’s crypto regulation space. While the country’s current VDA rules largely focus on taxation and AML regulations, there is still no clarity on the asset class’ broader regulatory framework.
India’s Crypto Regulation Has Hit Another Delay
Indian crypto industry has been awaiting a key parliamentary meeting on August 27 for more clarity in the space. However, the meeting is now cancelled, once again adding uncertainty to the country’s crypto regulation. The current delay means that the country has to wait longer for a comprehensive regulatory framework.
Contributing more to this uncertainty, the official notice also stated that the panel’s next sitting, scheduled for September 3, 2026, will not include crypto discussions. Instead, the committee will talk about “Direct Tax Reforms: Simplification, Rationalisation and Ease of Compliance” with representatives from the Department of Revenue and the Central Board of Direct Taxes (CBDT). Thus, the session will solely focus on tax implementation, tax revenue, buoyancy, compliance, and broader tax reforms.
Why the Cancelled DEA Hearing Matters
The latest cancellation is especially concerning for Indian crypto investors. This is mainly because the meeting could have brought more clarity to the industry, with the crypto regulation focus expanding beyond tax and AML rules. As the Department of Economic Affairs is a major player in shaping the country’s crypto policy, the agency’s views would have influenced the parliament’s approach to VDAs.
While the parliamentary hearing is cancelled and a new date is not announced, the industry is now under pressure. The country is supposed to wait until the hearing happens to know about the government’s future plans on crypto regulation. Although the latest delay in the meeting could impact the country’s crypto regulation efforts, it will not impact the existing rules of buying, selling, or holding VDAs.
The Bigger Problem: Tax Rules Are Advancing, Regulation Isn’t
The major issue is the continuous delays in India’s crypto regulation even when tax rules advance. Unlike many other developed countries, India holds strict crypto tax policies, including a 30% tax on VDA gains and a 1% TDS on transfers. The country has also introduced strong compliance requirements, including the anti-money laundering (AML) rules.
At the same time, the wider crypto industry of India is still lacking clarity in regulation. There are currently no rules that define how different types of crypto assets, exchanges, and other platforms will be regulated. Thus, the growing gap between tax compliance and crypto regulation continues to create uncertainty in the market.
What Parliament Has Already Recommended for Crypto
Notably, the parliamentary panel has already called for clear crypto regulations. Recently, the panel suggested the creation of an interim self-regulatory organization (SRO) to oversee the industry until a broader regulatory framework is established. The proposal intends to include the SRO under the supervision of an existing regulator like the RBI or SEBI.
The parliament’s proposal focuses on investor protection and stronger standards for crypto businesses. However, these are only recommendations, not regulations. The country still needs to do more to introduce a comprehensive crypto regulation that provides clear rules for VDAs, exchanges, and businesses.
Why the RBI–Finance Ministry Divide Matters
Significantly, the divide between the RBI and the Finance Ministry continues to complicate India’s efforts to establish a clear crypto regulation framework. The RBI remains cautious about cryptocurrencies due to concerns of financial stability and other risks. At the same time, the Finance Ministry and Parliament have shown interest in regulating the sector rather than restricting it. Only a clear agreement between these key policymakers could help the country introduce clear rules that govern VDAs.
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Will India Get a Crypto Law This Financial Year?
This question remains difficult to answer amid the cancellation of the hearing without a replacement date. Now, it is too early to say whether India will launch new crypto regulations during the current financial year. Although the parliament has recommended regulatory policies, the government needs to act on them to make them law.
As of now, the country is more likely to take a phased approach than introduce an immediate standalone crypto law. The next key development is the announcement of the rescheduled date of the parliamentary hearing. Investors will be closely watching the announcement, the meeting, and its potential implications on the industry.
Source: cryptonews.net