Banning crypto would encourage non-state players, says industry body

New Delhi: A blanket ban on cryptocurrencies would encourage non-state players, leading to more unlawful usage of such currencies, the Blockchain and Crypto Assets Council (BACC), a part of the Internet and Mobile Association of India (IAMAI), said on Thursday.

The remark comes as the government is set to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for consideration and passing in the upcoming winter session of the parliament.

The IAMAI, in its submission before the Supreme Court earlier, listed several negative outcomes of a ban, such as zero accountability and traceability of the origin and end usage of cryptocurrencies, besides a complete evasion of taxes. A ban will also adversely affect retail investors.


"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 in a statement.

According to a Lok Sabha bulletin published on Tuesday, the crypto bill “seeks to prohibit all private cryptocurrencies in India but allows for “certain exceptions to promote the underlying technology and its uses”.

Indian holders of cryptocurrency went into panic-selling mode on Tuesday, flooding the exchanges at midnight after being spooked by the wording of the government release, which could be interpreted as a ban on all cryptocurrencies. Prices of the highest-valued cryptocurrencies such as Bitcoin and Ethereum fell as much as 15%. Crypto exchanges took to calming investors, urging them not to rush into selling.

"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 BACC said.

"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 added.

Top crypto exchanges including CoinDCX, WazirX, and Coinswitch Kuber are part of the BACC. Recently, Ashish Singhal, cofounder Coinswitch Kuber and Sumit Gupta, cofounder CoinDCX, were appointed as its co-chair.