Startup association presents recommendations for regulatory framework as it pushes boost for business instead of blanket ban.
IndiaTech.org, an industry association representing startup founders and investors, has called for the registration of homegrown, locally registered cryptocurrency exchanges in a five-point policy framework aimed at crypto regulation.
It proposes that cryptocurrencies should be given the status of assets such as gold and stocks instead of currencies and cash. It also says sufficient checks and balances should be put in place through customer verification, well-defined reporting mechanisms, accounting standards to tackle suspicious activities, traceability of fraudulent transactions and counter-terrorism funding measures.
“India with the right monitoring regulations in place can create an avenue to participate in wealth creation opportunities in this new asset class that can be like gold in the future for the generations ahead,” IndiaTech said in its white paper. “Allowing the crypto industry can also help India decrease the cost of capital for its [small and medium-sized enterprises] and build an easier channel for them to provide their services to global customers.”
IndiaTech says its framework can address the government’s concerns over cryptocurrencies and ensure that India can capitalize on the industry’s potential. It has shared its white paper with the Ministry of Finance, the Ministry of Commerce and Industry, the central bank and government public policy think tank NITI Aayog.
It also recommends enabling taxation of crypto to treat it in the same way as other assets. Further, it says the government should allow innovative uses of crypto by businesses and create specific safeguards and frameworks to protect retail investors in the course of token issuance.
It emphasizes encouraging self-regulation in the industry, which would produce a code of conduct in line with the government’s objectives of safeguarding consumers and financial stability until policies and laws are established.
The proposal comes as Indian industry players are urging New Delhi to regulate the crypto industry rather than ban it.