Nasscom is one of the largest trade organizations in India and it has spoken out against the government’s proposed ban on cryptocurrencies. The opinion was reportedby a local financial news platform, The Economic Times. In this report, Nasscom said,
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.
Nasscom has claimed that rather than placing a blanket ban on cryptos, the government should spend time understanding how the technology works and create sandboxes where they can test out practicality and effects of decentralized digital assets. The firm believes that if this is not done, the government will only deny development of legitimate businesses and applications that will otherwise serve the economy of the nation. For this, the trade organization proposes a proper regulation that will nurture the industry and make it difficult for illegal activities,
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.
Nasscom is particularly sensitive to the Indian government’s decision as it has a large stake in IT and other technologies that businesses use. It was established in the late 80s and currently employs more than 2700 people.
Indian officials have a love-hate relationship with cryptocurrencies. The Reserve Bank of India has stoppedfinancial institutions from entertaining any crypto related individuals or firms. The decision has been challenged previously, with the highest legal body, the Supreme Court, upholding the prohibition. This led to shutdown of crypto exchanges in the country, including a famous local one, Coinome. In its email directed towards its users, the exchange said,
India is currently going through uncertainty on crypto guidelines and regulations. The government of India has not yet taken a decision on the regulatory framework for crypto exchanges or wallets. Further, the supreme court is yet to act upon the public interest litigation (PIL) on (the) regulation of crypto assets.
On the other hand, the Minister of Finance, Anurag Thakur, has stated during a session of the Indian Upper House, the Rajya Sabha that there is no lawthat bans cryptocurrencies. Yet, there is an alleged draft of a bill circulating proposes a complete ban of cryptocurrencies, with provision of a state backed digital Rupee.