The Blockchain and Crypto Assets Council (BACC), which is part of the Internet and Mobile Association of India (IAMAI) on Thursday said a blanket ban on cryptocurrencies will encourage non-state players, thereby leading to more unlawful usage of such currencies.
BACC's statement comes days after the government listed for introduction in Parliament a bill to ban all private cryptocurrencies, with some exceptions.
In a statement, IAMAI said there would be 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, it added.
The Council 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, the statement said.
On the other hand, the Council has advocated their use only as an asset.
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The Council said it believes that 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.
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 statement said.
The Council said it 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.
'The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021', to be introduced in the winter session of Parliament beginning November 29, seeks to "create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India.
The bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses".
The Blockchain and Crypto Assets Council (BACC) represents crypto exchanges based in India and includes companies like CoinDCX, WazirX, and Coinswitch Kuber.
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