- Web3 firm Hashed Emergent has proposed a new model law, the “COINS Act,” for crypto in India
- This private sector proposal includes creating a dedicated regulator and a “safe harbor” for ICOs
- The industry-drafted Act also calls for a national Strategic Bitcoin Reserve
A new model law called the COINS Act has been proposed to bring clarity and structure to India’s digital asset regulatory environment.
The draft law, announced this week by Web3 firm Hashed Emergent and policy group Black Dot, seeks to create an industry-driven policy system that balances innovation with oversight.
The COINS Act focuses on defining digital asset rights and establishing clear regulations for the industry. A key part of the model law is its emphasis on “crypto-native constitutional rights,” such as the freedom of self-custody and financial privacy, which would form the legal foundation of India’s approach.
Proposal for a new, dedicated crypto regulator
A central component of the framework is the creation of a new regulatory body, the Crypto Assets Regulatory Authority (CARA). This new authority would be tasked with overseeing crypto activities specifically within India.
Related: India’s Wealthy Are Piling Into Crypto, and Exchange Data Proves It
CARA’s jurisdiction would cover India-facing services but would not extend to fully decentralized, borderless protocols, ensuring the law focuses on relevant businesses without stifling innovation.
Balanced approach to regulating exchanges and DeFi
The COINS Act outlines different compliance standards for centralized exchanges and decentralized protocols. Centralized exchanges would face strict licensing requirements, ensuring full regulatory oversight.
Related: India’s Crypto Market to Expand: Two More Global Exchanges to Get Approval
Non-custodial protocols, on the other hand, would be subject to a lighter disclosure regime. This distinction aims to create a balanced regulatory environment where truly decentralized services are not overburdened with unnecessary regulations.
Plan includes an ICO “safe harbor” and a strategic Bitcoin reserve
In addition to oversight, the COINS Act includes provisions for nurturing India’s domestic crypto ecosystem. A “safe harbor” provision is included to protect initial coin offerings (ICOs) by Indian-origin token projects, giving them a protected environment to develop.
The framework also calls for the establishment of a Strategic Bitcoin & Crypto-asset Reserve, aimed at securing India’s long-term crypto-asset sovereignty. The proposal would mandate the central government to build this reserve, ensuring India maintains a strong position in the global crypto market.
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