BANNING CRYPTOCURRENCIES IS NOT THE SOLUTION, A REGULATORY FRAMEWORK MUST BE DEVELOPED: NASSCOM
“NASSCOM believes that the recent proposal of the Inter-ministerial Committee of the Government to ban all cryptocurrencies barring those that are backed by the Government, is not the most constructive measure. 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.
To address consumer protection concerns, cryptocurrency-based businesses can be tested in the regulatory sandboxes being launched by the financial sector regulators across the country. 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. Conversely, a ban is more likely to deter only the legitimate operators as they have no intent to be non-compliant.
Additionally, the committee’s recognition of the potential of Distributed Ledger Technology (DLT) is a welcome step towards enhancing innovation in the ecosystem. We look forward to engaging with the government in considering how DLT can be used in India, to improve transparency, access to information and citizen services.
We will continue working with government stakeholders and seek more discussions on this issue.”