Analysis: Hashed Emergent & Black Dot release India’s COINS Act crypto model law
Image: Proponents hope the COINS Act model law can offer policy certainty and reverse developer flight from India’s crypto ecosystem.
On Monday, Web3 venture firm Hashed Emergent and policy advisory group Black Dot jointly released a proposed regulatory framework for India’s digital asset industry.
The Crypto-systems Oversight, Innovation and Strategy (COINS) Act offers policymakers a blueprint for a “clear, industry-led policy environment,” according to Friday’s announcement.
Though non-binding and requiring parliamentary introduction and passage to become law, the model law targets India’s clunky crypto regulation. Among its goals: establishing fundamental digital rights for users, setting up a dedicated regulatory body (Crypto Assets Regulatory Authority – CARA), and improving tax ambiguities.
Addressing the real regulatory pain points
Hashed Emergent legal counsel Arvind Alexander, a lead architect of the model law, told Cointelegraph that the initiative targeted India’s “fundamentally broken” approach to early-stage crypto rulemaking.
“The thing that spurred us was the regulatory uncertainty that India brought to bear from 2021 onwards… it started with a complete ban, then it moved to no regulation. It was policy guesswork,” Alexander said in an interview.
The COINS Act fundamentally argues against what Alexander describes as the current “reactive, post-advisory, advisory-heavy regime.” Proponents contend there’s an urgent need to establish clear, constitutionally enshrined rights for crypto users and developers. Key components include:
• **Self-custody rights**: A core principle establishing users’ control over their digital assets.
• **Tax simplification**: Proposing a transparent sourcing regime to replace the punitive elements of the prevailing Income Tax Act.
• **CARA creation**: Advocating for a dedicated regulator modeled on global frameworks like the EU’s MiCA and Singapore’s regulatory sandbox.
• **Layered compliance**: Distinct regulatory paths based on custody (centralized exchanges require licenses; non-custodial protocols disclosure; permissionless protocols exempt).
Currently, under India’s Income Tax Act, gains from virtual digital asset (VDA) sales are taxed flat at 30%. Furthermore, transactions exceeding approximately $115 incur a mandatory 1% Tax Deducted at Source (TDS).
“We therefore flipped the policy script,” Alexander stated. “COINS Act starts by enshrining fundamental crypto rights as extensions of India’s Constitution, making them inviolable.”
Reversing brain drain and exploring asset reserves
The model law’s authors believe India has lost precocious crypto talent to globally friendly jurisdictions. Vishal Achanta, Hashed Emergent’s senior legal counsel, pointed to numerous DeFi protocol launches and associated development projects emanating from India that subsequently migrated offshore.
“[A] cross-section of globally deployed decentralized protocols in the last five years, many from India, have launched offshore rather than in India,” Achanta told Cointelegraph.
According to proponents, the COINS Act offers a mechanism to combat this “offshoring phenomenon” by establishing India as a potentially destination of choice through rights certainty, safe harbor provisions, and calibrated oversight.
Additionally, the proposed legislation includes an original idea: a strategic publicly held BTC reserve. Achanta revealed this concept would recast legally seized crypto assets into a “digital store of value,” managed by an oversight committee in the Indian parliament.
“The COINS Act would provide… a central repository that we propose be called the Public Crypto Assets Reserve, or PCAR,” Achanta explained. “I think over time, we will see that established countries figure out ways to safely, appropriately monetize their central bank digital currency or sovereign digital reserves using Bitcoin as the asset.”
This proposal follows June 26 remarks from a senior official of India’s ruling party (BJP) who advocated for a Bitcoin reserve pilot.
Blueprint for legislative action
To advance their proposed framework, Hashed Emergent intends to collaborate with industry bodies. In conjunction with the Bharat Web3 Association, they plan an event to compare the COINS Act against the government’s own discussion papers.
“They are building it in such a way that policymakers can’t dismiss it as niche,” Alexander noted in an interview. “We believe crypto’s future depends on communities speaking in one voice.”
Meanwhile, Black Dot is targeting workshops with key policy entities, including the Department of Economic Affairs, the Securities and Exchange Board of India (SEBI), and the Reserve Bank of India (RBI).
CoinTelegraph attempted to contact the Indian Ministry of Finance, RBI, and SEBI for response but did not receive any comment before publication.
Alexander’s description of the model law-building process strongly suggests grassroots influence. Reflecting “strength in numbers,” the approach evokes principles outlined in Satoshi Nakamoto’s Bitcoin whitepaper.
“If India’s crypto community unites around the principles embedded in COINS Act, the path to policy change is significantly clearer,” Alexander concluded in the interview.
Recent pronouncements from Indian crypto advocates echo this sentiment, suggesting unified action by citizens may ultimately pressure policy makers.
