Introduction
The global stablecoin market capitalisation has crossed USD 230 billion in 2025, representing a growth trajectory that can position stablecoins as critical financial instruments that enterprises can leverage in emerging digital payment corridors and enhance operational competitiveness in global markets.
In a recent statement, India’s Finance Minister Nirmala Sitharaman acknowledged that innovations such as stablecoins are reshaping the landscape of money and capital flows and India must prepare to engage with them. Globally, governments are actively taking steps towards mainstreaming stablecoins into the financial system – the GENIUS Act in the USA, MiCAR in the EU along with Singapore, UAE, Hong Kong and Japan establishing regulatory frameworks for stablecoins.
Building on our previous FIG Paper (No. 43 – VDA Series 5) examining global stablecoin usage, this paper examines recent regulatory and market developments, in India and globally.
Indian Enforcement Trends
FIU-IND’s Enhanced Supervision of the Sector
In October 2025, the Financial Intelligence Unit of India (“FIU-IND”) issued notices to 25 offshore virtual digital asset service providers (“VDASP”) for not registering with the FIU-IND and non-compliance with the Prevention of Money Laundering Act, 2002 (“PMLA”). The PMLA mandates transaction reporting, record keeping, and other obligations on the VDASPs which also includes registration with the FIU-IND.
In September 2025, FIU-IND revised the registration requirements with stricter fit-and-proper criteria, including Computer Emergency Response Team – India (CERT-In) cybersecurity audits and Partner Accreditation for Compliance and Trust (PACT) certificate to be obtained from registered VDASP partners.
Balanced Judicial Intervention
On October 7, 2025, the Bombay High Court dismissed an appeal by Zanmai Labs (WazirX operator) challenging a Singapore arbitration order requiring Zanmai Labs to secure claims by honouring bank guarantees in relation to the cyberattack on Wazir X’s multi sig wallets leading to losses exceeding USD 230 million. The court held that Zanmai Labs had no basis to ‘socialise the losses’ and could not disclaim responsibility as they had a fiduciary duty in respect of assets held under their custody.
On October 25, 2025, the Madras High Court recognised VDAs as a form of property under Indian law. This is a significant development as the court held that crypto assets, while intangible, are now capable of being owned, possessed, held in trust, and subject to proprietary protection similar to intangible movable property. This aligns with global approaches by courts in USA, UK, New Zealand, Singapore and Hong Kong which recognised property rights and protections in relation to crypto assets.
Implications on the Indian Ecosystem
By recognising crypto assets as a form of property with custody accountability and fiduciary duty on the exchanges, the High Court rulings provide long-awaited legal clarity that earlier rulings had sidestepped. This recognition strengthens the enforceability of proprietary and fiduciary rights within digital ecosystems and would allow for inter alia:
- Ownership and possession rights in crypto assets enforceable in courts.
- Holding crypto assets in trust.
- Claims by creditors for the proceeds of sale of crypto assets that can now form part of insolvency estates.
- Injunctive relief under the Specific Relief Act, 1963 to protect the property from any value erosion during litigation and compel specific performance.
- Consumer protections against deficiency of service by VDASPs, as crypto assets can now be classified as ‘goods’ under the Consumer Protection Act, 2019.
- Collateralization of crypto assets and possible crypto lending avenues.
Indian enforcement trends indicate legitimization of digital asset players, weeding out bad actors and making the Indian ecosystem more predictable for global and Indian VDASPs.
Global Developments
BRICS and De-Dollarization
The BRICS Leaders Joint Statement 2025, published in July 2025, emphasized strengthening cross-border payment systems and developing risk-managed cryptocurrency adoption. Amid US tariff impositions, BRICS leaders supported local currency trade and digital infrastructure for cross-border transactions between member nations (e.g. BRICS PAY and BRICS Bridge) in a bid to reduce USD dependence.
Acceptance of an INR-backed stablecoin among BRICS members, enabled by regional trade agreements, has the potential to strengthen the INR and significantly reduce working capital requirements to maintain forex reserves.
Global and Domestic Business Partnerships
The announcement of a USD 2.45 billion investment by a global digital assets player in an Indian VDASP registered with the FIU-IND creates a blueprint for India’s stablecoin market through strategic global-local partnerships.
International players can access India’s market of over 100 million crypto users without establishing direct local operations, partnering with a registered VDASP to leverage their regulatory relationships and local market know-how as a compliant pathway.
UAE Enforcement against Unlicensed Virtual Asset Service Providers
In the United Arab Emirates (“UAE”), the Virtual Assets Regulatory Authority (“VARA”) has issued multiple show-cause orders to crypto asset operators for providing virtual asset services without proper licensing. In October 2025, VARA fined 19 firms for unlicensed operations and breached marketing regulations along with immediate instructions to halt all unauthorized services. These steps form a part of a broader UAE crackdown on unlicensed operators.
Wazir X Restructuring Scheme Approved
On October 13, 2025, the Singapore High Court approved WazirX’s revised restructuring scheme, backed by over 95% of its creditors, enabling the crypto exchange to resume operations after the hack in July 2024. The plan includes partial repayments to affected users through a mix of stablecoin payouts and Recovery Tokens, aiming to restore trust and financial stability.
While this sets a precedent for crypto recovery and business continuity, the finality of the Singapore court’s order may be undermined. As the rulings from the Indian high courts rejected the ‘socialization of losses’ by Wazir X, legal challenges remain in implementing the scheme.
There is a clear enforcement focus in India signalling to the digital assets ecosystem that there is regulatory maturity and consequences for non-compliance. To further align with global approaches, a legislative framework for digital assets in India would be a welcome and necessary next step.
