Indian Crypto Exchanges: Real Use Cases Will Accelerate Regulatory Clarity
Crypto’s regulatory limbo in India might finally crack—if the industry stops chasing hype and starts delivering utility.
The Use Case Ultimatum
Exchanges are pushing developers to build practical blockchain applications—not just speculative tokens—to prove crypto’s worth to skeptical lawmakers. No more ‘degen farming’ excuses.
Regulators Want Substance Over Sizzle
Authorities aren’t impressed by NFT monkey jpegs or algorithmic stablecoins that collapse faster than a meme stock. They’re demanding tangible solutions: cross-border payments, supply chain tracking, anything with measurable GDP impact.
The Finance Jab
Meanwhile, traditional banks quietly lobby against crypto while repackaging blockchain patents into their ‘innovation’ PowerPoints—because nothing kills progress like pretending to embrace it.
Regulatory push dependent on scale, impact
Leaders from CoinSwitch, CoinDCX, and Binance pointed out a clear mismatch between India’s high crypto adoption and the government’s slow regulatory response. They noted that until the industry grows larger and proves its real-world impact, regulations are unlikely to MOVE faster.
Ashish Singhal, Co-Founder of CoinSwitch, said the industry must demonstrate deeper societal impact to gain the government’s attention: “For government to care and get regulations early, this industry needs to be much, much bigger. Today, as exchanges, we are talking about metrics like volumes, users, MAU, and DAU. But I think we need to start talking about how users’ life is changing using these ecosystems.”
According to Singhal, the conversation must shift from superficial market metrics to real-world use cases that simplify people’s daily lives. Without that, policymakers will continue to view crypto and Web3 as non-essential experiments.
Adding to this sentiment, SB Seker, Head of APAC at Binance, highlighted a disconnect between India’s strong consumer interest in crypto and the slower maturity of the developer ecosystem:
“There’s a disconnect,” he said, noting that India’s progress differs significantly from regulated Asian markets like Japan, South Korea, and the UAE.
Ultimately, he pointed out that India’s regulatory strategy will depend on what best serves the country’s national priorities — particularly because the crypto and Web3 landscape is still taking shape and constantly changing.
Web3 as the next layer of India’s digital infrastructure
Industry leaders at the event said that India has a real opportunity to drive the next chapter of digital innovation by weaving blockchain into the country’s existing Digital Public Infrastructure — the same backbone that powers systems like UPI payments and Aadhaar identity services.
They believe Web3 can become a new foundation for secure digital ownership, tokenized assets, and wider financial access, making technology more inclusive for millions of users across urban and rural India.
Singhal pointed to visions like Nandan Nilekani’s ‘Finternet’ — a future where assets are seamlessly tokenized, to illustrate why India must nurture Web3 now:
“Web3 is the direct next step in this evolution. If anyone, India can build and show the world a model in which a Web3-based ecosystem can scale to hundreds of millions of users. It can be used daily, repeatedly, across the country, even in the remotest part.”
Web3 funding revival, but mostly from the industry itself
A new India Web3 Landscape Report 2025, shared at the event, revealed that Indian startups in the sector have raised about $653 million across 45 deals this year. Yet, Indian VC firms remain hesitant, largely due to regulatory uncertainty.
Sharanya Sahai, VP of Hashed Emergent, noted that the funding momentum today is led by crypto platforms themselves, including Aptos, CoinSwitch, and CoinDCX — rather than traditional domestic investors.
CoinDCX CEO Sumit Gupta shared how difficult early-stage fundraising was back in 2018: “When we started in 2018, we found it very, very hard to get Rs 1 crore of seed capital. And we had to slash our valuation down to a very, very low number.”
Today, CoinDCX is valued at over $2.45 billion, following a recent investment from Coinbase Ventures. But Gupta stressed that challenges persist for Web3 founders, “Long term venture capital is not there in India. And if some international VC is there, then they will want the startup to set up their base outside, which does not add to the Indian ecosystem.”
CoinDCX Ventures has invested in around 20 Web3 startups, writing cheques of $100,000 to $500,000 and providing mentorship that new founders WOULD otherwise struggle to access.
Exchanges turned venture builders
To fill the funding gap and grow India’s crypto talent base, CoinSwitch launched its own Web3 fund, backing over 25 startups in the last two years. Their check sizes have grown significantly, from $250,000 to $2.5 million.
Singhal explained why these investments matter: “We have funded companies that are building Google for the blockchain space. We have funded companies which have done influencer management or tokenization on all influencers on their platform. So that the users can show their love, appreciations to those influencers.”
These examples reflect the next wave of innovation, not just crypto trading, but creator economy infrastructure, tokenized identity, and blockchain utility tools.
The road ahead: Build first, regulations will follow
The takeaway from India Blockchain Week was straightforward: regulation will only come when Web3 proves it can’t be sidelined anymore. For that to happen, the industry has to show real value, not just trading and token speculation.
It needs to become something people in India use in their daily lives, whether for financial services, entertainment, or even government-linked digital systems.
For now, Indian exchanges’ founders say they are committed to building the next generation of Indian digital infrastructure, even if they must fund it themselves.
Also Read: The Fall of Indian Exchanges: Why Global Platforms Win While Local Struggles
