The National Association of Software and Services Companies (NASSCOM), the leading information technology trade association, has published a statement opposing the Inter-Ministerial Committee’s recommendation of a blanket cryptocurrency ban.
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.NASSCOM
NASSCOM further added that cryptocurrency-based businesses can be tested in regulatory sandboxes. Notably, RBI had kept cryptocurrency businesses out of its regulatory sandbox framework. NASSCOM had urged RBI to include cryptocurrencies in the regulatory sandbox even back then.
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.NASSCOM
However, the statement lauded the committee for recognising the potential of Distributed Ledger Technologies (DLT).
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.NASSCOM
The President of NASSCOM, Debjani Ghosh, even put out a tweet reiterating the position taken by NASSCOM.
It is good to see a leading industry body like NASSCOM calling for positive cryptocurrency regulations. This might just trigger the government to see cryptocurrencies in a new light.
We have spoken about NASSCOM’s statement on our YouTube channel: