The plan to ban cryptocurrencies in the country, as suggested by a high level panel, is “not a solution,” and the government should work towards developing a risk-based framework to regulate and monitor them, Nasscom said on Tuesday.
“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,” the industry body said in a statement.
“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,” it said.
Nasscom said “a ban is more likely to deter only the legitimate operators as they have no intent to be non-compliant”.
A government panel last week had proposed a draft bill titled Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019. The move will make it illegal to deal in any cryptocurrency in India that is not regulated by the government. That will include Bitcoin, Ethereum, Ripple and more. As of now, there are 2,116 cryptocurrencies, with a market capitalisation of $119.46 billion, the panel added.