The ongoing discussions will help authorities better understand the usage of cryptocurrencies in the country. The move could give more ideas on crypto transactions involving domestic and offshore platforms.
However, the panel hasn’t unveiled the exact measures yet. But it is clear that stronger monitoring could give regulators more tools to identify suspicious activity and improve oversight of the market.
India Needs Better Blockchain Tools to Track Transactions
Since September 8, 2026, the financial committee, led by BJP lawmaker Bhartruhari Mahtab, has held eight crypto meetings in total. As per data unveiled by India’s FIU, around 36 million KYC-verified accounts were registered with Virtual Asset Service Providers (VASPs), including crypto exchanges, by the end of April 2025. At the time, the accounts held around ₹34,000 worth of cryptocurrencies.
By May 2026, the number 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. This highlights the growing number of Indians using regulated crypto platforms, and the need for better tools to monitor these activities.
Thus, 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.
What This Means for Crypto Exchanges?
Interestingly, 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.
The effect will be even greater in the case of exchanges managing transactions connected to offshore platforms. Better blockchain-tracking systems could make it easier for authorities to follow the movement of funds across different networks and identify transactions that require closer examination.
Why Crypto Monitoring Before Clear Regulations?
The latest reports suggest that the Indian government may be focusing on crypto monitoring first, as they want to better understand how digital assets are being used. In the current situation, the authorities believe that crypto monitoring is more important than a broader regulatory framework. With stronger transaction monitoring, regulators will be able to understand the flow of funds, identify suspicious activity, and monitor domestic and offshore transactions.
Related: India Tightens Crypto Regulation, Expands FATCA and CRS Rules