Cryptocurrency ban in India will encourage non-state players, unlawful usage: BACC

Amid the panic and confusion over the likely cryptocurrency ban in India, the Blockchain and Crypto Assets Council (BACC), a part of the Internet and Mobile Association of India (IAMAI), said on Thursday that a blanket ban on the digital currencies in the country will encourage non-state players, thereby leading to more unlawful usage of such assets. 

The IAMAI, in a statement released to the media, said it fully concurs with the view of Prime Minister Narendra Modi, who had recently stated that countries should work in tandem to ensure that such virtual currencies do not end up in the wrong hands. 

PM Modi, in his recent speech, had said, "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." 

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The IAMAI further stated that in its submission before the Supreme Court earlier it had listed several negative outcomes of a ban on cryptos such as zero accountability and traceability of the origin and end usage of the cryptocurrencies, besides a complete evasion of taxes. A ban, IAMAI noted, will also adversely impact retail investors.

"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," it said in its statement. 

"On the other hand, the Council has advocated their use only as an asset. The Council 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," the statement read further. 

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IAMAI stated that crypto exchanges 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," it added. 

The BACC represents crypto exchanges based in India and is mandated to create a transparently regulated crypto asset business in India.