The outburst of recent news about the Government of India planning to introduce a new law to ban trading of cryptocurrencies has been a cause of worry for 1.7 million Indians trading in digital assets. In light of this issue, a law firm, among many others, has recommended the need for a regulatory framework instead of a ban.
Nishith Desai Associates is an India-centric global law firm specializing in emerging and futuristic technologies. The law firm wrote a letter to The Cabinet Secretary stating the need for regulatory approaches to crypto-assets and further building an ecosystem of blockchain in the country. In their comprehensive plea, they’ve emphasized how this ecosystem’s development will aid Digital India missions. A complete ban will be against the interests of innovation, liberty, and trade, the letter states.
Detailed and Proportionate Regulatory Approaches
The law firm also spoke about its independent policy paper titled “Building a Successful Blockchain Ecosystem for India: Regulatory Approaches to Crypto-Assets’. The paper has been shared with India’s Government. It comprises detailed and proportionate regulatory approaches to crypto-assets that can help India continue trading in them. Some of these have been adopted in various leading jurisdictions globally.
“No developed and democratic country has banned crypto-assets despite recognizing the same concerns that the Indian government recognizes e.g., money laundering, volatility, consumer protection etc.”Letter to the cabinet secretary by Nishith Desai Associates
The law firm further drew a parallel or worse impact of laundering cash through traditional methods than through cryptocurrencies. Many countries and markets are working towards mitigating the risks associated with virtual assets. These include Australia, Canada, the E.U., Japan, Singapore, South Africa, South Korea, the UK, and the US. Their approach has involved regulating the companies trading in digital assets for AML/CFT purposes, and licensing or registration for monitoring and ensuring compliance.
The letter further highlighted the benefits crypto-assets would bring to the Indian software ecosystem’s growth. Various industry bodies too testified the fact. Regulation is the solution to curb and contain the disadvantages of every digital innovation. That’s why Nishith Desai Associates have urged the Government to consider their approaches from their paper for a symbiotic decision.