Entrepreneurs seek Regulating cryptocurrencies in India rather than banning it

Entrepreneurs are strongly protesting against the government's proposal to ban cryptocurrencies in India, naming it arbitrary. They are asking government for proper regulation by authorities which can enhance a common man's trust in the digital currency.

As heard, the government is planning to introduce a banning law on all private cryptocurrency in India, as well as creating a framework for a national cryptocurrency to be issued by the Reserve Bank of India (RBI).

Despite some exceptions, the move might end ambiguity on cryptocurrency which is neither banned nor legalised in India.

Shivam Thakral, chief executive officer and co-founder of BuyUcoin said: "This is quite an emerging space. People really like it, not just in India but across the globe. The phenomenon which is backing cryptocurrency, which is blockchain technology, is in itself the future of finance. If you just eliminate this product of blockchain technology then you are putting a dead-end to an innovation. Tomorrow no one would innovate in India. They'll have to think what if the government comes and bans it right away." As he expressed, the government should instead set up a regulatory framework so that people have the comfort of trading with these companies.

The bill prohibits the use of cryptocurrency as legal tender and currency. Additionally, cryptocurrency will be kept out of the payments system.

"I am hoping that the government says, instead of taking an approach of banning it, let me regulate it. The fact that the government is going to debate banning is worrying. Some parts of cryptocurrency are not understood, so you regulate that. For instance, if a company wants to avoid an IPO and go for an ICO, regulate that. The wording of the Lok Sabha proposal seems different from the 2019 proposed bill. Now they say that private cryptocurrency could be banned but there could be exceptions," said Ajeet Khurana, former CEO of Zebpay.

The former Clause 26 (A) and (B) of the proposal stated “if you possess cryptocurrency the government will mandate a way to dispose of it off. But currently, it is unclear whether there will be a one-time opportunity to sell it, or you will have to surrender it. This bill also has enabling provision for a central banker. They may want to ban private cryptocurrency with exceptions created.

"Whatever we are discussing is about the bill which was written in 2018 and it has been three years or so. A lot of information would have gotten outdated because this is a very fast-moving industry by itself. Eventually, it would be very unfair to just apply the 2018 suggestions as a part of the bill. The right way would be to have a committee to come up with new suggestions depending upon how it has come up in the rest of the world," said Sathvik Vishwanath, CEO and co-founder of Unocoin.

Notably, The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 would be issued by the Reserve Bank of India (RBI) as the regulator and Enforcement Directorate as the investigating authority for offences under the cryptocurrency bill.