NEW DELHI: Indian IT industry body NASSCOM on Tuesday said that the recent proposal by an inter-ministerial group (IMG) to ban all private cryptocurrencies is not “ the most constructive measure” “Instead, the government should work towards developing a risk-based framework to regulate and monitor cryptocurrencies and tokens,” it said.
According to Nasscom, a ban would inhibit new applications and solutions from being deployed and discourage tech start-ups.
The IMG had recently submitted a report and a draft bill to the government banning all private cryptocurrencies and recommending that those dealing in them be jailed. Among the reasons cited for the proposal was protecting consumer interests amidst high volatility in cryptocurrency values.
Nasscom, however, said that “cryptocurrency-based businesses can be tested in regulatory sandboxes being launched by the financial sector regulators across the country” to address consumer protection concerns.
“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. Conversely, a ban is more likely to deter only the legitimate operators as they have no intent to be non-compliant,” it said.