Banning all cryptocurrencies apart from the ones backed by the government is “not the most constructive measure”, industry body NASSCOM said in a statement (given below) to MediaNama. It said that a ban will only deter legitimate operators since they have no intent to be non-compliant, would discourage tech start-ups and handicap India from participating in new use cases that cryptocurrencies and tokens offer. The body suggested that developing a risk-based framework to regulate cryptocurrencies would be a better idea than putting an outright ban on them. It said that crypto businesses could be be tested in regulatory sandboxes. The Finance Ministry has proposed a legislation that bans the use of cryptocurrency in India, and makes violations punishable with a fine or with one to ten years of imprisonment. Called the “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019”, the bill states that “cryptocurrency shall not be used as legal tender or currency at any place in India”. It also makes promotion, advertising, any abetment in participation of use of cryptocurrency punishable with a fine, or prison term of up to 7 years. It makes a repeat offence punishable with a prison sentence of 5-10 years along with a fine. The bill was drafted by an inter-ministerial committee chaired by Subhash Chandra Garg, secretary of the Department of Economic Affairs under the Finance Ministry. Created on November 2, 2017, the committee’s other members were MeitY Secretary Ajay Prakash Sawhney, SEBI Chairman Ajay Tyagi, and RBI Deputy Governor…
