Cryptocurrency: Need of the hour is regulation not prohibition, say experts

Amid expectations of a possible Bill in Parliament to prohibit trading in cryptocurrency, players in the sector are hoping that the government will consider regulation and not a full-scale ban on trading.

“The draft crypto Bill is very crude and an early draft version is to be presented at Parliament. As an industry, we’ve been working towards positive regulations and are confident that our government will look towards regulating crypto in India like the rest of the world,” said Nischal Shetty, CEO and Founderof domestic cryptocurrency exchange, WazirX.

“The government has to take a measured approach such as a licensing regime or a policy on cryptocurrencies. Banning it is not the answer. Introducing the Bill in Parliament will also open it up for debate and discussion. India is also a signatory to FATF and G-20, both of which have come up with their own recommendations and policies for dealing with cryptocurrencies, which are progressive in nature,” said Ajeet Khurana, former head of the Blockchain and Cryptocurrency Committee of the IAMAI and former CEO of Zebpay.

A retrograde step

Probir Roy Chowdhury, Partner, J Sagar Associates, also termed it as retrograde step. “The need of the hour is regulation not prohibition. We should take guidance from our neighbouring country Singapore, which has regulated and allowed cryptocurrency trade. With regulatory oversight and guidance, it may be a boon for the fledgling Indian economy to allow cryptocurrency trade and consequently investments in India,” he said.

Since the Supreme Court judgment lifted the ban by Reserve Bank of India on trading in cryptocurrency in March this year, the sector has seen robust growth with a lot of retail participation and investments by different players.

A large number of players also entered the sector, though many had been concerned about the lack of regulation.

The government is now looking at introducing a new Bill in the current session of Parliament to ban trading in cryptocurrencies.

The Reserve Bank of India had, in 2018, banned transactions relating to cryptocurrencies. “Virtual currencies and crypto currencies are not legal tender,” has been an oft repeated caution by the Finance Ministry and the RBI.

In an earlier interaction with BusinessLine, Shetty had said the Internet and Mobile Association of India (IAMAI) is working on a code of conduct for cryptocurrencies with regulatory pointers and guidelines on issues such as KYC to address concerns on money-laundering and illegal activities.

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