India's parliamentary finance panel nears final report on crypto after year-long review

Year-Long Review Reaches Its Final Stage

India's Standing Committee on Finance is closing in on its final report on virtual digital assets (VDAs), capping off a study that began in September 2025. The committee has been conducting a study titled "A Study on Virtual Digital Assets (VDAs) and Way Forward," which has drawn in testimony from a wide range of institutions. Chaired by BJP MP Bhartruhari Mahtab (@BhartruhariM), the committee heard from domestic and global exchanges including Binance, WazirX, ZebPay, CoinDCX, CoinSwitch, and Coinbase, alongside government arms including the Financial Intelligence Unit, the Central Board of Direct Taxes, the Revenue Department, and the Ministry of Corporate Affairs.

Monday's session was described as a round-up discussion, though Mahtab made clear the committee has not yet reached a consensus. He framed the committee's central dilemma bluntly: the government neither accepts virtual digital assets nor wants to regulate them, yet that regulatory vacuum is itself creating room for misuse. "Not regulating it is also leaving greater scope for different types of indulgences," he said.

India's government is expected to respond on cryptocurrency policy next week, after which the Standing Committee on Finance will prepare and submit its formal report. The committee's eventual report will mark one of the clearest signals yet of where Indian lawmakers stand on regulating, restricting, or continuing to leave virtual digital assets in their current uncertain legal status.

The regulatory gap is not new. Since 2022, India has imposed a 30% capital gains tax and a 1% tax withholding at source (TDS) on virtual digital assets, and has required crypto trading platforms to share transaction data with the central anti-money laundering agency, the Financial Intelligence Unit (FIU). Yet India has consistently lacked a written law specifically regulating cryptocurrency trading, custody, and investor protection.

UPI Merchant Fee Also on the Agenda

Alongside the crypto discussion, MPs raised concerns about a separate development in India's digital payments landscape. The National Payments Corporation of India (NPCI) has introduced a 0.4% Merchant Discount Rate (MDR) on select person-to-merchant UPI transactions above ₹2,000. The new framework will take effect from October 15, 2026. Mahtab indicated the UPI fee issue may come up formally at the committee's next meeting.

Person-to-person transfers remain free regardless of amount, while specified merchant transactions above ₹2,000 attract the MDR within the payment ecosystem. The government says consumers should not bear the MDR, and approximately 96% of person-to-merchant transactions remain unaffected under the framework. Small merchants earning up to ₹1 lakh monthly through QR codes pay zero MDR on all transactions.

Both issues, crypto regulation and UPI fees, reflect a broader question India's policymakers are grappling with: how to govern a fast-moving digital financial system without stifling adoption or leaving consumers exposed.

Sources:
CoinPedia: Parliament Panel Wraps Year-Long Crypto Review, Report Due Soon
Entrackr: NPCI Sets 0.4% MDR on UPI Above Rs 2,000
MediaNama: Parliamentary Panel Calls for Regulatory Framework for Virtual Digital Assets