India’s crypto ecosystem is vast but adrift. It is one of the world's largest crypto markets, both in terms of user base and developer community, yet the industry is awaiting regulatory clarity from the government. As countries like the US rally behind crypto rules and attract capital, Indian founders face a tough choice: stay and wait or move abroad.

Ashish Singhal, Co-founder of India’s largest crypto exchange CoinSwitch, is one of the strongest proponents of "building for India", but he says the lack of public debate and policy direction is costing India its edge. On the launch of new "crypto options" offering for the CoinSwitch exchange, Singhal spoke to Fortune India about India’s missed opportunities, and how a clear policy and regulatory support could help India catch up fast.

On the idea behind enabling crypto options, Singhal says it will simplify derivative investment for crypto traders at low fees, while facilitating real-time settlement and 24x7 trading. "The crypto market is pretty young in its evolution, and it's been just 16-17 years since it began. From the financial crisis and the birth of Bitcoin, it has come a long way. Now, the market is evolving. Institutions are entering through ETFs, futures trading is picking up, and options, a major component of the stock market, are starting to take shape in crypto."

According to Singhal, while stock options usually require Rs 2,000-3,000 to start, CoinSwitch users can begin with as little as Rs 90. The company is also launching a video series to help users understand strategies, hedge, do short-term trades, and protect investments in bear markets.

Acknowleding that options trading come with certain financial risks, Singhal says it’s "different" in crypto. "In the stock market, most retail users buy options, but don't sell them. Option selling is where the money is, but it's very expensive. In crypto, it’s different. It’s much cheaper to build an order book. Our platform is a two-sided marketplace; buyers and sellers both participate. That naturally hedges user risk. It’s not just speculation. Users can build long-term strategies tied to their spot or futures portfolios."

He also talked about Sebi’s crackdown on equity F&O trading and its relevance to crypto, saying CoinSwitch has adopted some of the principles advocated by the regulator. "We’ve always advocated for a licensed regime. As a company, we can only control our behaviour, not others. But if there's a regulatory body setting the rules, everyone is forced to follow them. That’s better for users."

He says CoinSwitch is a "compliance-first company" and welcomes regulation. "But of course, when rules come, companies will need to adapt, and we’ve been doing that for eight years. We're confident we’ll adapt quickly when the time comes."

On the government's reported discussion paper on crypto, Singhal says it's the right first step. "It won't lead to regulation immediately, there will be many steps in between, but the conversation is long overdue. For the last two years, we haven’t had a real public debate on crypto in India."

Crypto remains unregulated in India, though not illegal. A draft bill was introduced in 2021 but hasn’t been tabled. The government and the RBI have expressed concerns about the illicit use of crypto.

Singhal says India should begin the dialogue. "A discussion paper allows us, industry leaders and users, to engage with the government. We need to understand each other’s views and work toward something workable. Regulation may be far off, but this is a solid first move."

Seeing India’s crypto trajectory, says Singhal, India is 1.5-2 years behind countries like the US, UAE, or Singapore, where rules are clearer. "The discussion paper might give us better clarity on timelines, but that’s my current estimate."

Crypto transactions in India are taxed at 30%, plus 1% TDS for transactions over Rs 10,000. Crypto is classified as a virtual digital asset (VDA) under the Income Tax Act.

India has one of the largest crypto markets and blockchain developer bases, but policy remains in wait-and-watch mode. Singhal says India should lead in exporting technologies like AI, crypto, and blockchain. "India should be exporting these technologies, not just providing services. The lack of clarity is pushing founders out to Dubai, Singapore, where regulations are clear."

Around 60% of CoinSwitch’s over 2 crore users come from tier 2 and 3 cities, and 75% are under 35. Its volumes have risen 200–300% since the 30% tax was introduced in 2022, though not yet back to 2021 levels. Singhal says that's part of a global trend, pointing to Google Trends showing crypto interest at "50% of 2021 levels," even with Bitcoin hitting new highs.

Singhal, who grew up in Meerut, says the company's mission is to build in India. "Because the problem we want to solve is in India. We come from middle-class families. Growing up, if someone hadn't paid our school fees, we wouldn’t be here. We want to make money equal for all, especially the middle class. How do we make investing accessible to someone with limited means? That's our mission."

Speaking about the rising popularity of stablecoins, Singhal says the opportunity is significant, especially for remittances. He suggests a CBDC-backed stablecoin. "India has capital controls, so peer-to-peer money transfer doesn’t work well. A government-backed CBDC could help. A private INR stablecoin could work too, but it needs RBI regulation. Tech-wise, we’re ready. Stablecoins could make remittances faster and cheaper. If you could receive money in five minutes without price fluctuation losses, it would be huge. But regulation has to come first."

About the funding slowdown, Singhal, whose company has raised $262 million so far, says uncertainty has driven away investors. "In 2021–22, India was a hub for crypto investment, but uncertainty around regulation has slowed it down. Other sectors have bounced back, but crypto hasn’t yet. With clear regulations or even directional clarity, VCs will return. Right now, many are on the sidelines. That’s the gap we need to close."

CoinSwitch has also launched a venture arm to support Web3 founders in India with capital and know-how. "Even if full regulation takes time, basic clarity can stop this brain drain. It's not too late, but we’re losing ground." He supports greater policy engagement and says stakeholders are joining more associations to work with policymakers. Bharat Web3 Association (BWA), he says, is part of that. "Earlier, crypto wasn’t a priority for big associations, so we had to create our own. But now the ecosystem is large enough to be part of broader industry forums."