Industry body IAMAI (Internet & Mobile Association of India) on Wednesday appealed to the Indian government to not impose a blanket ban on cryptocurrency and said that the aim should instead be to develop a robust mechanism to regulate the related ecosystem in the country.
Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds, operating independently of a central bank.
As per IAMAI, the crypto community consists of over 10 million crypto holders having over USD 1 billion worth of crypto assets, over 300 startups generating tens of thousands of jobs and hundreds of millions of dollars in revenue and taxes.
The jobs are being generated across a variety of functions – legal, compliance, tech, marketing, business development, finance, etc – in India and abroad, IAMAI noted.
“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,” it said, adding, “There’s a daily trading volume of USD 350 million – USD 500 million.”
“Hence, we are urging the government to define the cryptocurrency regulation framework after due consultation with IAMAI and stakeholders such as India crypto-asset user groups and the exchanges that facilitate buying and selling,” IAMAI said.
Banning cryptocurrency will have an “adverse” impact and will lead to a loss in investments and hit 10 million Indian crypto customers, IAMAI noted.
The cryptocurrency community in India had expressed its apprehension when the central government was in talks of introducing a bill in the Parliament to ban all cryptocurrencies. Several quarters had also expected India to launch its own digital version of the rupee in its stead.
Reserve Bank of India Governor Shaktikanta Das had also said that the apex bank has certain “major concerns” over the impact that cryptocurrencies may have on the financial stability in the economy and has conveyed the same to the government.
The RBI had virtually banned cryptocurrency trading in 2018 and had directed all entities regulated by the central bank to cease dealing in virtual currencies.
The Supreme Court had also asked the Centre in 2019 to frame policies for crypto, and in 2020, struck down the curbs imposed by the RBI.
However, earlier this month, Finance Minister Nirmala Sitharaman had said that the government is still formulating its opinion on cryptocurrencies and will take a “calibrated” position.
The Reserve Bank had through various public notices on December 24, 2013, February 1, 2017, and December 5, 2017, cautioned users, holders and traders of virtual currencies, including bitcoins, regarding various risks associated in dealing with such virtual currencies.
(With inputs from agencies)