India

COINS Act model law offers blueprint for crypto regulation in India

Posted on by Minakshi

India’s Crypto Future: Model Law Offers a Regulatory Blueprint

A new model law, the Crypto-systems Oversight, Innovation and Strategy (COINS) Act, has been unveiled, aiming to provide a clearer regulatory framework for digital assets in India. This non-binding framework seeks to address key challenges facing the crypto industry and policymakers alike.

Addressing Key Pain Points

The COINS Act aims to tackle crucial issues that have hindered the growth of the crypto sector in India, including:

  • Punitive taxation on crypto transactions
  • Regulatory uncertainty and lack of clarity
  • Absence of a dedicated regulatory body for crypto assets

A Dedicated Crypto Regulator: CARA

The proposed model law suggests the establishment of a new regulatory authority specifically for crypto assets. This body, named the Crypto Assets Regulatory Authority (CARA), would oversee and regulate crypto-related activities within India.

Drawing Inspiration from Global Standards

The COINS Act incorporates best practices and standards from international regulatory frameworks, specifically:

  • The European Union’s Markets in Crypto-Assets Regulation (MiCA)
  • Singapore’s regulatory sandbox approach

These global standards have been tailored to fit India’s specific market conditions and constitutional framework, making the framework more relevant and effective.

Key Provisions of the Model Law

The Act offers a framework focused on clarity around crypto-related digital rights and access.

  • Self-Custody: Guidelines addressing the secure management of one’s own crypto assets.
  • Protocol Access: Rights around the ability to interact with various blockchain protocols.
  • Financial Privacy: Safeguards for responsible financial privacy within digital asset activities.
Summary:

  • A new model law, the COINS Act, proposes a clearer regulatory framework for crypto assets in India.
  • The Act recommends establishing a dedicated regulatory body (CARA) and incorporates global standards.
  • The framework aims to address taxation, uncertainty, and the lack of a dedicated regulator.
Key Takeaways:

  • The COINS Act is a significant step towards providing regulatory clarity for the crypto industry in India.
  • The proposed Crypto Assets Regulatory Authority (CARA) could streamline oversight and foster innovation.
  • By incorporating elements from EU’s MiCA and Singapore’s regulatory approach, the framework aims for global compatibility.
  • Addressing punitive taxation is crucial for encouraging wider adoption of crypto assets.
  • The model law could potentially transform India into a more attractive destination for crypto businesses and investors.