India’s trade association for the information technology sector has criticized a proposal by a government committee to ban cryptocurrencies, Business Standard reports.
According to the National Association of Software and Services Companies (Nasscom), regulations for the cryptocurrency sector are preferable to a ban. This is because, in Nasscom’s view, a ban will only hurt the law-abiding players in the sector who intend to comply.
The influential body stated:
Instead, the government should work towards developing a risk-based framework to regulate and monitor cryptocurrencies and tokens. A ban would inhibit new applications and solutions from being deployed and would discourage tech startups. It would handicap India from participating in new use cases that cryptocurrencies and tokens offer.
Regulations for the crypto industry, on the other hand, would hinder criminal activities conducted used digital currencies:
We should work towards creating a regulatory framework that will constantly monitor and prevent illegal activities. Regulating would allow the law enforcement agencies to be better equipped to understand these new technologies, enable them to gather intelligence on criminal developments and take enforcement actions.
With the risks crypto poses to consumers having been cited as one of the reasons for the proposed ban, Nasscom has suggested that financial regulators across India place cryptocurrency businesses under regulatory sandboxes for some time. According to Nasscom, this will help in addressing consumer protection concerns that currently exist.
Despite the criticisms the trade body had with regards to the government committee report recommending the cryptocurrency ban, Nasscom praised sections of the report which were considered pro-blockchain. This includes the use of distributed ledger technology in enhancing transparency in governance and improving citizens’ access to information and public services.
Additionally, Nasscom urged the government to consider developing a federal digital currency. The report which was released last week had proposed that the only cryptocurrencies that should be spared from the ban are those issued by the Indian government.
The committee which compiled the report was formed in November 2017 and was chaired by the Economic Affairs Secretary. Subhash Chandra Garg has been the Economic Affairs Secretary until a cabinet reshuffle which saw him moved to the power ministry. In the committee, Garg emerged as one of the more-sober voices when it comes to cryptocurrencies.
As previously reported by CCN.com Garg opposed proposing a ban on cryptocurrencies instead preferring regulation. He was, however, outnumbered with the finance minister and other senior government officials being in favor of a ban.
The inter-ministerial committee is likely to re-examine the proposed ban but unfortunately for India’s crypto sector, Garg will not only be missing from the committee but is also planning to quit the government in three months.
Last modified: March 4, 2021 2:39 PM