CoinSwitch Cofounder Says India’s Crypto Growth Hinges on Regulatory Clarity, Not Just Taxes

TL;DR: India’s crypto expansion depends on regulatory clarity, not tax rates, as founders move offshore and the 2026 budget keeps strict taxes unchanged.

India’s retail payments run on the Unified Payments Interface (UPI), which processes over ₹150 lakh crore annually. The central bank’s digital currency (CBDC) sits on top of UPI as a programmable cash token, enabling targeted subsidies without changing the user experience.

The 2026 Indian budget left crypto taxation unchanged, keeping a 30% tax on gains and a 1% tax deducted at source (TDS) on every transaction, one of the world’s highest crypto tax rates. Bitcoin (BTC) traded at $27,800, up 2.1% in the past 24 hours, with a market capitalization of roughly $545 billion.

CoinSwitch co‑founder Ashish Singhal said many Indian Web3 founders are shifting operations to Dubai, Singapore and Hong Kong where licensing rules are clearer and banking access is easier. CoinSwitch reported a 12% quarter‑over‑quarter drop in Indian‑based trading volume, while offshore platforms saw a 9% rise.

Regulatory ambiguity, rather than tax levels, is cited as the main driver of the talent outflow, threatening India’s developer advantage. Investors should watch for any draft crypto bill expected in the 2027 budget session and for potential approval of a domestic Bitcoin exchange‑traded fund (ETF) that would signal clearer classification.