Banning cryptocurrencies will encourage illegal activities, says industry body BACC  |  Photo Credit: iStock Images
A blanket ban on cryptocurrencies will lead to more illegal usage of digital assets said industry body Blockchain and Crypto Assets Council (BACC) on Thursday.
“A blanket ban on cryptocurrencies will encourage non-state players thereby leading to more unlawful usage of such currencies,” said Internet and Mobile Association of India (IMMAI) affiliated body in a statement on Thursday.
IAMAI said it fully concurs with Prime Minister Narendra Modi’s recent statement that it is important that all democratic nations work together on this (cryptocurrency) and ensure it does not end up in the wrong hands, which can spoil our youth.
It added that in its submission before the Supreme Court, IAMAI listed several negative outcomes of a ban such as zero accountability and traceability of the origin and end usage of the cryptocurrencies; besides a complete evasion of taxes. A ban will also adversely impact retail investors.
The BACC further said it 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. 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, it added.
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 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.
BACC’s statement comes on the heels of government listing listing the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for introduction in upcoming Winter Session of Parliament. The description of the Bill by Lok Sabha bulletin issued Tuesday evening said the legislation “seeks to prohibit all private cryptocurrencies in India” but allows for “certain exceptions to promote the underlying technology and its uses”.
This has led to widespread speculation that all private cryptocurrencies will be banned in India once the legislation is cleared.