India's KYC-verified crypto user base has grown to 39.3 million accounts as of May 2026, according to Financial Intelligence Unit (FIU-IND) data reviewed by the Parliamentary Standing Committee on Finance, which has convened eight dedicated meetings on digital assets in recent years.

The committee, chaired by BJP lawmaker Bhartruhari Mahtab, is examining stronger transaction-tracking mandates, cross-chain analytics deployments, and tightened reporting obligations for Virtual Asset Service Providers (VASPs), the domestic regulatory category covering crypto exchanges. No draft law has been published; the panel remains in the recommendations phase.

How large is India's regulated crypto market?

FIU-IND disclosed that approximately 36 million KYC-verified accounts were registered with Indian VASPs by the end of April 2025, holding roughly ₹34,000 crore in digital assets. By May 2026, the verified account count had climbed to about 39.3 million, while the estimated aggregate value of holdings had dropped to approximately ₹20,436 crore. The committee's working figure for average per-account balance sits at around ₹5,200, a number officials cite as evidence of widespread retail participation and the scale of the resulting monitoring task.

What capabilities is the panel evaluating?

The committee is reviewing advanced blockchain-analytics platforms designed to trace funds across heterogeneous networks and to verify the movement of value between Indian venues and offshore exchanges. FIU-IND already maintains transaction-monitoring infrastructure, but the panel has concluded that current tooling is insufficient to connect records across chains or to reliably identify counterparties on foreign platforms.

What changes for crypto exchanges?

Exchanges face the prospect of three concrete obligations if the recommendations are adopted:

• Tighter KYC controls at onboarding
• Mandatory retention of transaction records for extended periods
• Expanded suspicious-activity reporting to FIU-IND

Compliance costs will rise most sharply for platforms processing flows linked to offshore venues, which the committee identifies as the highest-risk channel for unmonitored cross-border transfers.

Why monitoring first, regulation second?

Committee members argue that visibility into how digital assets actually move through the Indian financial system must precede statutory rule-making. This sequencing, they maintain, reduces the risk of statutes that fail to address cross-chain swaps, mixers, and offshore-routed transactions. The approach also allows FIU-IND to build case studies from live data before Parliament considers a broader crypto bill.

The committee's preference for monitoring-first policy reflects a view within the government that current data on cross-border and decentralized flows is too thin to anchor a credible framework. Officials have signaled that the recommendations, once finalized, will inform future legislation covering consumer protection, taxation, and market integrity.

What comes next?

The committee is expected to issue a formal recommendation report outlining the proposed monitoring upgrades. The report will set the agenda for any subsequent legislative action or executive rule-making by the Ministry of Finance and FIU-IND. Until that report lands, exchanges should expect continued informal pressure to enhance compliance functions even without new statutory mandates.