Tag: IAMAI

Banning cryptocurrencies could lead to more unlawful usage, says BACC, BFSI News, ET BFSI

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A blanket ban on cryptocurrencies will encourage usage by non-state players, which will further increase unlawful usage, said Blockchain and Crypto Assets Council (BACC), part of the Internet and Mobile Association of India (IAMAI), in a statement on Thursday.

This statement comes days after the government listed the Cryptocurrency Bill in the Parliament for introduction. The Bill urges ban on all private cryptocurrencies, with some exceptions.

There would be several negative outcomes of a ban such as zero accountability and traceability of the origin and end usage of the cryptocurrencies; besides a complete evasion of taxes, IAMAI said.

A ban will also adversely impact retail investors, it added.

BACC has always been in favour of prohibiting the usage of private cryptocurrencies as a currency in India by law since usage as currency is likely to interfere with monetary policy and fiscal controls, it said. However, BACC has also advocated their use only as an asset.

The Council believes that ‘smartly regulated crypto assets business’ will protect investors, help monitor Indian buyers and sellers, lead to better taxation of the industry, and limit illegal usage of cryptos.

The Blockchain and Crypto Assets Council (BACC) represents crypto exchanges based in India and includes companies like CoinDCX, WazirX, and Coinswitch Kuber.

The Council believes that the efforts of the exchanges should be supported by law, which should enable them to provide safer services to investors and fair taxes to the government.



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Crypto should be allowed only as an asset: IAMAI

Banking & Finance

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As uncertainty over the proposed crypto regulation bill over banning private cryptos continues, the Blockchain and Crypto Assets Council (BACC), of Internet and Mobile Association of India said in a statement on Thursday supported the use of cryptocurrencies only as an asset.

It added, however, that a blanket ban on cryptocurrencies will encourage non-state players thereby leading to more unlawful usage of such currencies. “The Council has always argued in favour of prohibiting the usage of private cryptocurrencies as a currency in India by law since usage as currency is likely to interfere with monetary policy and fiscal controls. On the other hand, the Council has advocated their use only as an asset. The Council believes that a smartly regulated crypto assets business will protect investors, help monitor Indian buyers and sellers, lead to better taxation of the industry, and limit illegal usage of cryptos,” BACC said.

Also read: Crypto currencies recover, back in the green on Indian exchanges

Negative outcomes of a ban

BACC added it had listed several negative outcomes of a ban such as zero accountability and traceability of the origin and end usage of the cryptocurrencies; besides a complete evasion of taxes. A ban will also adversely impact retail investors.

“Crypto exchanges based in India offer an effective instrument of monitoring and are dedicated to creating an ecosystem that guarantees investor protection besides bringing both the investors and exchanges under proper tax laws. The Council believes that the efforts of the exchanges should be supported by a law that should enable them to provide safer services to investors and fair taxes to the government,” it said.

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Do not ban cryptocurrency, Internet and Mobile Association appeals to government

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The Internet and Mobile Association of India (IAMAI) on Wednesday appealed to the government not to ban cryptocurrency, and instead proposed that robust mechanisms should be developed to regulate the ecosystem.

“Cryptocurrency has been generating jobs across a variety of functions — legal, compliance, tech, marketing, business development, finance — in India and abroad. Given the scale and diversity, the good governance and regulation of the cryptocurrency ecosystem in India is critical and will give impetus to the government of India’s Digital India vision,” IAMAI said in a statement.

Digital assets

It also pointed out that the country is witnessing a considerable rise in digital assets.

“The crypto community consists of over one crore crypto holders holding over $1 billion worth crypto assets, over 300 start-ups generating tens of thousands of jobs and hundreds of millions of dollars in revenue and taxes. There’s a daily trading volume of $350-500 million,” IAMAI added.

The comments come in the wake of the government listing the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for introduction, consideration and passing in the current session of Parliament.

Nishith Desai, Founder, Nishith Desai Associates, noted that countries such as the US, Japan and other developed countries have a positive outlook towards crypto and are considering setting up regulations for the currency.

Finance Minister Nirmala Sitharaman has said the government will take a “calibrated” approach to crypto trading and that “negotiations and discussions” are going on with the Reserve Bank of India on how to regulate cryptocurrency in India. IAMAI members welcomed the statement but have raised concerns against the proposed ban of cryptocurrency.

Naveen Surya, Chairman, Fintech Convergence Council, and Chairman Emeritus of Payments Council of India (PCI), said: “Through AML/CFT and KYC-related compliances, the government can ensure a safe and secure crypto market for investors.”

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