Govt should establish a regulatory mechanism for Cryptocurrency: IAMAI

Cryptocurrency players represented by industry body Internet and Mobile Association of India (IAMAI) have welcomed the Finance Minister Nirmala Sitharaman’s comments that the government will take a “calibrated” approach to crypto trading and “negotiations and discussions” are going on with the Reserve Bank of India (RBI) on how to regulate cryptocurrency in India.

The body has appealed to the Government of India not to ban cryptocurrency, proposing instead to develop mechanisms to regulate the ecosystem. The body has reasoned that cryptocurrency has been generating jobs across a variety of functions such as legal, compliance, technology, marketing, business development, finance — in India and abroad.

According to IAMAI, “The crypto community consists of over 10 Million crypto holders holding over $1 Billion worth crypto assets, 300+ startups generating tens of thousands of jobs and hundreds of millions of dollars in revenue and taxes. There’s a daily trading volume of $350 million – $500 million.” It added, “The proposed move to ban will have an adverse impact and will lead to loss in investments and hit 10 million Indian crypto customers. 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.”

The government listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for introduction, consideration and passing in the current session of Parliament. Under the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, India also aims to launch its own digital currency or the Central Bank Digital Currency (CBDC). This measure will be in line with many central banks which have begun planning to issue their own digital currencies. Members of IAMAI, while welcoming the Finance Minister’s statement, voiced their opinion and apprehensions against the proposed ban of cryptocurrency.

Emphasising on the regulation of the crypto market in India, Naveen Surya, Chairman, Fintech Convergence Council and Chairman Emeritus of Payments Council of India (PCI) said, “Through AML/CFT and KYC related compliances, the government can ensure a safe and secure crypto market for investors. As India develops its CBDC, the regulatory framework can also define the bridge between the proposed digital INR and public blockchain cryptocurrencies from a forex standpoint”.

Cryptocurrency exchange founders also weighed in with their observations on how the crypto industry in India has been growing.

Sumit Gupta, CEO and Co-founder, CoinDCX said, “One must understand, the crypto industry in India is homegrown, with entrepreneurs who come from premier institutes. Those who are invested in crypto are people who understand the internet and do their research well. Imagine 20% of our clientele consist of women who come mostly from Tier-1 & Tier-2 Cities..”