Industry leaders at TechSparks 2026 highlighted a fundamental shift in the Indian cryptocurrency market, moving from speculative spot trading toward derivatives and regulated infrastructure. Panelists emphasized that current tax policies create competitive disadvantages for domestic exchanges, while calling for expanded regulatory sandboxes to foster innovation.
Key Takeaways
- Regulatory imbalance: Domestic exchanges face stricter tax requirements, including a 30% tax framework and source deduction, which experts argue disadvantages them against foreign platforms.
- Market evolution: Trading volume is migrating from spot markets to futures and derivatives, a trend expected to accelerate in the near future.
- Sandbox expansion: Industry figures proposed opening regulatory sandboxes—currently limited to traditional capital markets—to web3 fintech companies to test new financial products.
- Infrastructure needs: While exchanges have improved investor education regarding asset risks, gaps remain in on-chain identity verification and regulatory clarity.
- Tokenisation potential: Experts pointed to tokenizing corporate bonds as a key opportunity for institutional growth, provided the regulatory environment accommodates non-traditional players.
Competitive Landscape and Taxation
Rajagopal Menon, Vice President at WazirX, noted that the Indian crypto market experienced rapid growth during the 2021-22 bull run, with WazirX processing approximately $48 billion in spot transactions. However, subsequent taxation measures altered the market trajectory. Menon argued that domestic exchanges currently operate at a disadvantage because they must adhere to strict tax compliance measures that foreign platforms often bypass. He advocated for a unified regulatory environment to ensure fairness for Indian-based companies.