AI and Blockchain in India Governance: Future, Risks and Crypto Law

COINS Act and AI and Blockchain in India Governance: Regulation Debate

The role of AI and Blockchain in India Governance is set to expand, according to Union Minister of Science and Technology Jitendra Singh. He said emerging technologies like artificial intelligence (AI), blockchain, and the Internet of Things (IoT) will soon be central to how the Indian government plans, delivers, and secures public services. 

Is this going be an add-on point in the India’s #1 crypto adopter 2025 rank?

Source: X

AI, Blockchain and IoT in Governance

Singh explained that AI can help the government predict trends and design better policies. He added, Blockchain can bring transparency and cut corruption by creating non-altering records, meanwhile, IoT can improve the delivery of public services. 

A practical example of the Digital Life Certificate with face recognition, which allows seniors to claim pensions without standing in queues or filing endless paperpaper, already underscores its benefits. 

Where Does Crypto Regulation Fit Into This Future?

While the government is openly backing blockchain for governance, India’s approach to cryptocurrencies remains hesitant. But recently the industry voices seem to be surging. Venture firm Hashed Emergent and advisory group Black Dot unveiled the COINS Act, a model law designed to provide a clear framework for digital assets in India.

Key Highlights Of The Proposal

The proposal, called the Crypto-systems Oversight, Innovation and Strategy (COINS) Act, recommends the creation of a Crypto Assets Regulatory Authority (CARA). 

Inspired by Europe’s MiCA regulation and Singapore’s sandbox approach, the Act seeks:

• Protect self-custody rights

• Safeguard financial privacy

• Ensure permissionless access to protocols

• Establish a strategic Bitcoin reserve

• Fund reserve partly with confiscated assets

But will this blueprint ever become reality? Or Will India bring a full crypto law in 2025? The model law carries no legal weight unless Parliament decides to adopt it. 

Why Is the Government Still Reluctant?

Despite the nation ranking first in global crypto adoption in 2025, the government continues to tread carefully. Here are the most hurdled-some in the way:

• Evading Legitimization: Complete regulation may turn crypto into a known systemic financial asset, which authorities do not want. 

• Shielding Domestic Payments: U.S. dollar-pegged stablecoins can diminish India's UPI system, which is the pillar of its digital payment platforms.

• Security Issues: Transactions involving Bitcoin, Tron, and USDT have been associated with terrorism funding, drug dealing, and cybercrime, which are usually hidden behind VPNs and fictitious accounts.

Absence of dedicated regulations doesn’t mean negligence in oversight. India has leaned on heavy taxes, a 30% flat tax on profits and 1% TDS on transitions above 9,500 rupees. On the other hand, Cyber security audits are now mandatory for all exchanges after a rise in cyber heists. 

Adoption vs. Regulation

Despite the uncertainty, millions of Indians continue to trade and invest, even with heavy taxes and no dedicated rules. Making it stand as a #1 globally in crypto adoption in 2025. 

For many in the sector, the future of AI and Blockchain in India Governance could decide whether the country becomes a hub for innovation, or remains a market struggling under unclear rules.