In a rapidly evolving global cryptocurrency landscape, India stands at a crossroads. CoinSwitch Co-founder Ashish Singhal has recently emphasized the need for a balanced regulatory framework that supports innovation without stifling growth. As India’s largest crypto platform navigates a complex regulatory environment, Singhal’s call highlights the urgency for policymakers to provide clarity, enabling the country to lead in Web3 and digital assets rather than lag behind. This article delves into Singhal’s perspective, the current state of crypto in India, and the potential implications of a more nuanced approach.
Who is Ashish Singhal and CoinSwitch?
Ashish Singhal, co-founder and Group CEO of PeepalCo (CoinSwitch’s parent company), has been a pivotal figure in India’s crypto ecosystem since launching CoinSwitch in 2017 alongside Govind Soni and Vimal Sagar Tiwari. What began as a hackathon project—a simple aggregator for cryptocurrency exchanges—has grown into India’s largest crypto investment app, boasting over 20 million users and a valuation exceeding $1.9 billion. Backed by global investors like Andreessen Horowitz, Tiger Global, and Coinbase Ventures, CoinSwitch prioritizes user education, compliance, and accessibility, particularly for users from tier-2 and tier-3 cities, where 60% of its base resides.
Under Singhal’s leadership, the platform has introduced innovations like Crypto Options for retail users and Proof of Reserves (PoR) disclosures to build trust and transparency. CoinSwitch’s commitment to compliance is evident in its proactive engagement with regulators, including regular audits and advocacy for industry-wide standards. Singhal’s background in tech giants like Amazon and Microsoft has shaped his problem-solving approach, making him a vocal advocate for responsible crypto adoption.
Singhal’s Call for a Balanced Approach
Singhal’s recent statements underscore the need for “smart regulation over restriction” to balance innovation with compliance. In interviews and public forums, he has argued that India’s shift from a near-ban on crypto to a more cautious stance is positive but insufficient. “India must take steps to lead, not lag, in crypto and Web3,” Singhal stated, pointing to missed opportunities due to regulatory ambiguity.
Key elements of his vision include:
- Regulatory Clarity: Basic policy direction to prevent brain drain to crypto-friendly hubs like Dubai and Singapore. Singhal notes that unclear regulations are pushing Indian founders abroad, hindering domestic innovation.
- Balanced Taxation: Advocating for a revised tax framework, including allowing loss offsets against gains, to mitigate the current 1% TDS and 30% capital gains tax burdens that have deterred participation.
- Investor Protection and Innovation: Regulations that ensure security (e.g., through PoR and audits) while enabling products like stablecoins and cross-border payments. Singhal emphasizes educating users, especially young investors under 35 who form 75% of CoinSwitch’s base.
- Policy Engagement: Initiatives like the ‘Block by Block’ competition, launched in collaboration with Trilegal and NUJS Kolkata, invite law students to propose VDA (Virtual Digital Assets) regulations, fostering thoughtful ecosystem building.
Singhal warns that without this balance, India risks exporting talent and technology rather than leading in blockchain exports. He praises recent government moves, like the upcoming Discussion Paper on crypto regulations announced by the Department of Economic Affairs, as steps toward equilibrium.
The Current Crypto Landscape in India
India’s crypto journey has been turbulent. Post-2022’s 30% tax and 1% TDS regime, trading volumes dropped sharply, but adoption persists with over 100 million users nationwide. CoinSwitch’s growth—from 2 crore users in 2020 to over 2.5 crore today—reflects resilient demand, driven by simplified onboarding and micro-investments.
Challenges include:
- High Taxes and Compliance Costs: The absence of loss offsets has led to unintended negative impacts on retail investors.
- Global Competition: While the U.S. sees pro-crypto policies under recent administrations, India’s caution has slowed institutional inflows.
- Security Concerns: Incidents like the 2024 WazirX hack ($230M loss) highlight the need for robust regulations, which Singhal addresses through CoinSwitch’s cybersecurity focus.
Despite this, optimism abounds. The 2024 How India Invests report by CoinSwitch shows tier-2/3 cities as emerging hotspots, signaling broad-based growth.
Why a Balanced Approach Matters for India
A balanced regulatory framework could unlock immense potential:
- Economic Growth: Crypto could integrate with India’s digital economy, boosting exports in Web3 tech and attracting $10B+ in investments.
- Investor Confidence: Clarity would reduce uncertainty, encouraging more users and preventing capital flight.
- Innovation Hub: Policies supporting stablecoins and derivatives could position India as a global leader, similar to its IT boom.
- Risk Management: Smart rules would protect against money laundering and volatility while promoting ethical practices.
Singhal’s advocacy aligns with industry efforts, including CoinSwitch’s public policy team collaborating on G20 standards and mutual evaluations. He stresses that stakeholders must engage policymakers to avoid restrictive measures that could stifle the sector.
What’s Next for Crypto in India?
Looking ahead, Singhal envisions CoinSwitch expanding its venture arm to support Web3 founders and launching more user-centric products like advanced trading tools. The anticipated Discussion Paper could be a game-changer, inviting feedback to refine regulations. Initiatives like ‘Block by Block’ ensure diverse voices, including students, shape the future.
For investors and developers, this balanced path means greater accessibility and security. As Singhal puts it, “It’s not too late, but we’re losing ground”—a rallying cry for proactive policy-making.
Conclusion
Ashish Singhal’s push for a balanced crypto approach positions India to harness blockchain’s transformative power responsibly. By prioritizing clarity, compliance, and innovation, the country can empower its young, tech-savvy population and emerge as a Web3 powerhouse. As discussions intensify, CoinSwitch’s role in advocacy and education will be crucial. Stakeholders must act now to turn potential into progress.
