Just when you start losing hope in the Indian financial sector and related Indian government institutions, some organisation comes forward to make you feel worse by stating what the statesmen should already know. Industry body Nasscom (National Association of Software and Services Companies) has opposed the recent proposal for banning cryptocurrencies in India, saying it is “not a solution”.
“Nasscom believes 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,” the industry body said in a statement. “Instead, the government should work towards developing a risk-based framework to regulate and monitor cryptocurrencies and tokens.”
A government panel recently came up with a draft bill titled Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019 (and it is as bad as its title). The move, though not official yet, will make it illegal to deal in any cryptocurrency in India, which is not regulated by the government. Instead of accepting the changes in the financial playground, Indian policy-makers have decided to turn a blind eye to numerous advantages of cryptocurrencies over their traditional counterpart, fiat, and no one is surprised. The ban will include currencies such as Bitcoin, Ethereum, Ripple and more.
Nasscom though is not the only organisation that has expressed this view. Other stakeholders in the industry have said that the bill may not be able to stop crypto usage in India. Sathvik Vishwanath, CEO and co-founder of Unocoin, earlier told Mint that the online nature of crypto transactions makes it “impossible to tell where it’s happening from”.
Vishwanath stated that such a bill is a bad idea for the government since it might drive crypto transactions underground.
“As long as there’s a way to bring this money into regulated means, there’s a way to trace it and stop illegal activities,” he said.
Contrarily, according to EY India, the “move does not affect the industry at large which is leveraging the blockchain technology for positives.”
“Crypto is just one manifestation of the technology. The regulation takes India away from speculative use of technology and paves the way for beneficial use of technology and thereby propagates auditable, secure digital business ecosystem” said Prashant Garg, partner, data and analytics, EY India.
Garg is of the opinion that one of the positives of the ban might be that it will break the “perception that DLT/Blockchain is cryptocurrency or vice versa”.
The misconception, albeit washed away, will be dealt with at a huge price. Change can’t be stopped and the Indian government will eventually have to yield, and there is no way for us to put this without sounding like Thanos predicting the future.