India may strengthen cryptocurrency monitoring through better transaction tracking and blockchain capabilities as Parliament reviews the VDA framework, putting greater compliance and reporting pressure on crypto exchanges.
India could strengthen its cryptocurrency monitoring framework without immediately moving towards a comprehensive law governing Virtual Digital Assets (VDAs). A Parliamentary Standing Committee on Finance is preparing recommendations that could focus on better transaction tracking, stronger blockchain capabilities and improved surveillance of crypto activity.
The committee held several meetings on VDAs since September 2025. Its latest deliberations indicate that technology and monitoring could become central to India’s approach as lawmakers assess the existing framework.
Parliament Reviews India’s Crypto Framework
The finance panel examined the VDA ecosystem with government agencies, regulators and industry representatives. Its September 16 meeting with the Department of Economic Affairs was part of the committee’s ongoing study on VDAs and the way forward.
The committee may recommend stronger technological capabilities to trace crypto transactions across blockchain networks. Lawmakers are also examining whether India should maintain or modify its current policy towards digital assets.
This approach would focus on improving oversight rather than immediately creating a dedicated regulatory regime for the entire crypto market.
What Exchanges Could Face
Crypto exchanges could see greater scrutiny if the government adopts stronger monitoring measures. Better transaction tracking would require platforms to maintain robust compliance systems, customer records and reporting mechanisms.
India already brings VDA service providers under the Prevention of Money Laundering Act (PMLA). Exchanges and other covered entities must register with the Financial Intelligence Unit-India (FIU-IND) and comply with reporting and record-keeping requirements.
FIU-IND also updated its AML and CFT guidelines for VDA service providers in January 2026, adding to the compliance framework governing the sector. The government took similar action previously. In October 2025, FIU-IND issued notices to 25 offshore VDA service providers and said platforms catering to Indian users must comply with the applicable AML framework.
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