As reported by the local financial periodical, the major Indian trade organization, Nasscom, has shown opposition to the ban on cryptocurrencies, recently proposed by a government panel. The Nasscom commented on the move saying, “we believe 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.”
As found in the report, Nasscom claims that crypto projects can always be tested in regulatory sandboxes prior to launch. Nasscom also reportedly believes that banning crypto will only serve to push away legitimate businesses who are already pro-compliance.
Nasscom said, “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.”
India is considered to be having a hostile regulatory environment at present. Even though there is no official ban on cryptocurrencies in India at the moment, a number of crypto exchanges have closed as the Reserve Bank of India (RBI) has prevented financial institutions in the country from lending services to crypto-related businesses.
The circular prohibiting banks from offering services to crypto-related firms was released by the RBI in April 2018 and subsequently in May 2019, the crypto exchange Coinome halted its services in India due to regulatory pressure.