CoinSwitch and Trilegal Team Up To Address India’s VDA Policy Deadlock

In a market that has spent years navigating a maze of heavy taxation and legal ambiguity, the conversation around Virtual Digital Assets (VDAs) in India is undergoing a fundamental shift. 

Ashish Singhal, Co-founder of CoinSwitch, announced the publication of “Block by Block,” a comprehensive research compendium that provides a data-driven roadmap for the nation’s crypto future.

Produced in a unique tripartite collaboration with leading law firm Trilegal and the NUJS Law Review Kolkata, the compendium is the culmination of a national initiative to engage India’s brightest legal minds in solving the “crypto conundrum.”

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The initiative was led by CoinSwitch, India’s largest crypto trading platform, alongside Jaideep Reddy (Partner at Trilegal) and Dr. Shameek Sen (Professor at NUJS).

They convened a jury to select the top five research papers from law and public policy students across India, ensuring the proposals were grounded in “structured thinking” rather than just industry sentiment. Despite having over 20 million crypto users, the nation still lacks a formal VDA (Virtual Digital Asset) Act.

The Research-Led Vision

“If India wants durable regulation, it needs structured thinking,” Singhal noted. The “Block by Block” report argues that it must move away from a “one-size-fits-all” approach.

The compendium moves beyond general advocacy, offering granular solutions to the five biggest “pain points” in the Indian ecosystem. It outlines specific strategies for taxation, classification, compliance, consumer protection, and innovation.

1. Functional Classification: Moving away from treating all “crypto” as the same. The papers suggest a tiered system where stablecoins, NFTs, and utility tokens are governed by different rules based on their risk profile.
2. Harmonizing Tax Policy: While the 2025 Budget introduced mandatory reporting, “Block by Block” explores how to align these requirements with the existing 30% tax to ensure users aren’t driven to offshore, unregulated exchanges.
3. Compliance: Creating a friction-free KYC and AML (Anti-Money Laundering) framework.
4. Consumer Protection: Implementing safeguards against market volatility and fraud.
5. Innovation: Ensuring regulations don’t stifle the underlying blockchain technology.

It essentially provides the Ministry of Finance and the RBI with a peer-reviewed “plug-and-play” policy framework.

While the report was launched digitally and shared across policy circles in New Delhi, its primary impact is aimed at the 20 million+ Indian crypto users. Currently, many of these users have migrated to offshore exchanges to avoid the domestic 1% TDS and 30% flat tax. This report seeks to create a “level playing field” that would encourage them to return to the regulated Indian ecosystem.

A Collaborative “Sandbox” Approach

The timing is critical. As of February 2026, the G20 Roadmap on Crypto Assets (initiated during India’s presidency) is being localized by various jurisdictions. With the Indian government leaning toward “partial oversight” rather than full-scale legislation to avoid systemic risk, “Block by Block” offers a middle ground: Regulatory Sandboxes.

Ashish Singhal noted that “policy conversations need more depth.” For too long, the debate has been binary: “ban vs. legal tender.” This report fills the “intellectual gap” between those two extremes, focusing on how to protect users while allowing the asset class to grow—a balance that has eluded regulators since the 2022 tax implementation.

The compendium suggests a functional classification of assets. For example, a “utility token” used for a decentralized application should not be taxed or regulated in the same way as a “payment token” or a speculative investment. By refining these definitions, the report shows how India can implement the Prevention of Money Laundering Act (PMLA) and FEMA guidelines without stifling the Web3 startup culture that is currently fleeing to Dubai and Singapore.

For years, the Indian crypto industry has operated in a “gray zone” of uncertainty. This report represents a shift in strategy by major exchanges like CoinSwitch—moving away from simple advocacy toward providing the government with a ready-to-use legal blueprint. It signals that the industry is ready to self-regulate and collaborate on complex issues like consumer safety.

Also Read: INR 100 Crore Crypto Scam Ends with Arrest by Ahmedabad Police