India risks falling behind in Web3 and crypto as global rivals sprint ahead with clear regulations, warns CoinDCX Co-founder.
As the global cryptoverse undergoes a tectonic shift, countries like the US, UAE, and Singapore are racing ahead with clear regulations and innovation-friendly ecosystems. In contrast, India remains in wait-and-watch mode, even as crypto prices soar to new highs. The lack of urgency from policymakers has industry leaders worried that India could miss out on the Web3 and crypto revolution, despite having the world's second-largest blockchain developer base. In an interview with Fortune India's Manoj Sharma, CoinDCX Co-founder Sumit Gupta argues that without swift regulatory and tax clarity, the country risks losing talent, capital, and momentum. He also explains why CBDCs are fundamentally flawed. Edited excerpts:
1. What do you make of the recent Bitcoin rally, and where does India stand in the global crypto landscape?
The recent Bitcoin rally was largely anticipated, especially following Trump’s re-emergence in U.S. politics. He’s the first U.S. President to openly support Bitcoin and blockchain technology. That sentiment alone has acted as a catalyst for renewed investor enthusiasm. We're also seeing meaningful developments like the proposed Genius Act, a stablecoin framework in the US. Once such legislation is enacted, other countries typically follow, either out of competitiveness or urgency.
India, interestingly, leads the world in grassroots adoption of digital assets. The youth are particularly engaged, and digital assets have gone mainstream. While regulations remain a challenge, I’m optimistic. Over the next one to two years, we’ll likely see a more proactive stance from the Indian government. As global momentum builds, it becomes increasingly hard for any country to ignore this space.
2. Bitcoin recently touched a new high. What’s your outlook on price movement and investor participation, particularly in India?
While I can’t predict exact numbers, based on various analyst projections and sentiment trends, Bitcoin could potentially touch $1,50,000 by the end of the year. The rally is largely driven by institutional interest — major funds, family offices, and corporations are building long-term positions. These institutions have access to deep research and understand the long-term potential.
Retail participation in India is still somewhat constrained due to high taxation and regulatory uncertainty. However, tech-savvy individuals and younger investors are increasingly showing interest. What’s worth noting is that only around 7% of Bitcoin’s total supply is currently available on exchanges. The rest is held long-term in wallets, which suggests holders are waiting for higher prices and there’s room for further upside.
3. Are Indian institutional investors showing interest in crypto despite regulatory hurdles?
Yes, and we’ve responded to this demand by launching CoinDCX Prime, a specialised platform for HNIs, family offices, and institutional clients. It’s not just about onboarding them, our approach is to first educate, demystify the asset class, and explain the compliance and risk frameworks.
We've seen significant traction in the last two years. Today, CoinDCX has over 1,000 institutional accounts, the highest in the country. While the scale is still small compared to the US, the interest and intent are steadily growing. Our team regularly travels across India, from Delhi to Kolkata, to engage with institutional clients and onboard them in a safe, compliant manner.
4. Given the high taxes and lack of regulation, how optimistic are you about near-term regulatory changes in India?
We don’t have clear timelines, but the direction is positive. There has been a marked shift in the government’s openness towards digital assets. We’ve been invited to participate in multiple government forums where we present real-time data and user-level insights. The government understands there is serious interest in this asset class, particularly among younger, tech-oriented individuals.
India is the second-largest pool of blockchain developers globally, and could become number one in the next three years. The industry has consistently communicated the ground realities to policymakers. What we still need is a stronger public-private partnership, a framework for innovation, and a sandbox environment that allows responsible experimentation. The risks can be managed, but the opportunity must not be missed.
5. The government’s CBDC push has slowed. Globally, some countries are scrapping similar efforts. What’s your view on central bank digital currencies?
Honestly, I’ve never seen a fully successful CBDC model globally. Countries like China and the US have been experimenting for years, but the adoption has been limited. The key issue is that most CBDCs are being built on private blockchains, not public ledgers like Ethereum.
The fundamental value of blockchain is in creating trust where none exists. Private blockchains don’t need that; they’re closed systems, where participants already trust each other. That defeats the purpose. If CBDCs are to be successful, they must be built on public infrastructure, allowing broader participation and innovation. For example, exporting the Indian Rupee via a public INR-backed stablecoin could significantly strengthen the currency and drive global demand.
6. Can stablecoins solve India’s remittance challenges? What’s their future alongside tokenisation in finance?
Absolutely. India is the world’s second-largest remittance recipient, receiving over $100 billion annually. But common people lose around 5-6% in transaction fees. That’s $5 billion in value leakage every year. Blockchain can cut this cost to nearly zero. The technology is ready. What’s missing is a regulatory sandbox or framework that enables companies to build in a compliant, monitored environment. If enabled, stablecoins could completely transform cross-border payments.
Tokenisation involves converting real-world assets, like real estate or stocks, into blockchain-based digital tokens. It addresses inefficiencies. Today, buying a share takes a day to settle. Real estate is illiquid due to high ticket sizes. Tokenisation enables fractional ownership and instant settlement using blockchain. For instance, 1,000 people could invest in one property via blockchain tokens, making real estate accessible to retail investors. This model is already being implemented in the UAE, where global investors can buy as little as one square foot of land. In the next year or two, we’ll see tokenisation and stablecoins becoming massive themes.
7. What’s the reason Gulf countries like the UAE have become crypto hubs, and how far behind is India?
Gulf countries like the UAE have embraced innovation with clear regulatory frameworks. That’s why you see Indian entrepreneurs relocating there. CoinDCX has also expanded into the GCC region. We acquired BitOasis and now have full licenses in both the UAE (Vara) and Bahrain (CBB). We’re the largest regional player there.
India, unfortunately, is behind due to unclear regulations. If India doesn’t act quickly, we risk losing talent and innovation. Countries like the US, UAE, Singapore, and the UK are already offering supportive environments through regulatory sandboxes. India must follow suit to remain competitive.
8. How has India’s 2022 tax policy impacted CoinDCX user behaviour, and how does its current financial health look?
The tax policies have hurt domestic exchanges. While our user base and assets under management have grown, much of the trading has shifted to international platforms due to tax arbitrage. It’s a flawed setup, users pay tax only when trading on Indian exchanges.
Despite this, CoinDCX remains India’s largest exchange in terms of user base, trading volume, and assets. We've maintained a compliance-first approach and built trust over 7-8 years. We’re not growing as fast as we could have without the tax roadblock, but we're still progressing steadily.
We’re currently operating at break-even. We were burning capital post-2022 when volumes dropped overnight, but we’ve since launched new products, optimised pricing, and onboarded new users. Today, we have a strong balance sheet and continue to reinvest our profits in user education and expansion into tier-2 and tier-3 cities. CoinDCX has raised approximately $240 million, with a last-round valuation of $2.15 billion. Our investors include Bain Capital, Pantera, Polychain, B Capital, and Steadview.
9. What lessons have you drawn from incidents like WazirX and FTX?
Such incidents damage the entire ecosystem. They remind us why we must maintain high security and compliance standards. At CoinDCX, we invest heavily in cybersecurity. We regularly publish transparency reports, showing reserves and liabilities. We also maintain an insurance fund to protect customer assets.
Importantly, we are a fully Indian entity. Our terms of service are enforceable under Indian law, so users have legal recourse. Many international platforms do not offer that protection.
10. Final thoughts: What’s the road ahead for India in Web3 and crypto?
India has the users, the talent, and the opportunity. What’s missing is regulatory clarity. If that’s addressed, we can lead the global Web3 wave. CoinDCX’s mission is to make digital assets as mainstream as stocks. Twenty years ago, stocks weren’t mainstream either, but with education and accessibility, they became part of everyday finance. If we start building today, India can emerge as a Web3 powerhouse in the next 3-5 years. But if we delay, we risk missing the next big internet revolution.
Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.