India to Tighten Crypto Monitoring, Not Regulation

The Indian government is considering measures to strengthen crypto monitoring in the country, rather than implementing a comprehensive regulatory framework. A Parliamentary Standing Committee on Finance is working on recommendations to improve transaction tracking, use blockchain technology for surveillance, and increase transparency across the crypto system.

The committee, led by BJP lawmaker Bhartruhari Mahtab, has held eight crypto meetings since September 8, 2026. The data from India's FIU shows that around 36 million KYC-verified accounts were registered with Virtual Asset Service Providers (VASPs), including crypto exchanges, by the end of April 2025. The estimated value of holdings in these accounts was around ₹34,000.

By May 2026, the number of registered accounts increased to about 39.3 million, with the estimated value of holdings falling to around ₹20,436 crore. This means that the average crypto holding per verified account is around ₹5,200.

The committee believes that better blockchain-tracking tools could help authorities follow transactions across networks and verify where funds move. The FIU can already track crypto activity, but the committee states that the country needs more advanced tools to connect transaction records across multiple chains.

The potential implementation of the proposed monitoring measures could bring crypto exchanges under scrutiny. The government may mandate crypto exchanges to tighten their KYC policies, keep transaction records, and enhance reporting of suspicious activity to authorities.