Mumbai: The government should follow the example of Singapore in regulating cryptocurrency in India, a committee has urged.
The Blockchain and Crypto Assets Council (BACC), which lobbies for crypto sector regulations, said that Singapore had proactively taken measures to prevent nefarious activity without impending technology innovation, which India could learn from.
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The committee members were speaking at a virtual conference on “Evolving Crypto Regulatory Framework – Developments in India and Singapore” on Friday.
BACC, established last year, is part of the Internet and Mobile Association of India (IAMAI), an industry body of all the leading internet and technology companies in the country.
Earlier this year, Singapore updated its Payment Services Act, as part of which it said entities facilitating transmission, exchange or storage of cryptocurrencies should hold a license to operate.
Crypto in Singapore is also subject to expanded rules and regulations set by its central bank.
There is no legal framework governing India’s crypto industry. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was expected to be tabled in parliament’s budget session but was deferred.
Speaking at the conference, Nischal Shetty, founder and chief executive officer of India’s largest cryptocurrency exchange WazirX, said the government should issue guidelines to protect investors.
“As an industry, we would prefer seeing some guidelines that would help ease out the banking issues that exist in the country and the uncertainty that a lot of our customers have in the country on what protection they can expect,” he said.
Over the last few weeks, crypto platforms in India have been blocked by all major payment gateway services providers from processing payments, allegedly on the instructions of lenders such as ICICI Bank, ET reported on May 1.
“At one side, you have innovation that you do not want to curb, on the other end you have negative use cases that can emerge if you don’t have some sort of protection in the country,” Shetty said.
Instead of sweeping regulations, India should approach the industry by taking “baby steps” as it has with the Ministry of Corporate Affairs (MCA) mandate earlier this year that requires disclosure of cryptocurrency transactions by companies, he added.
Stressing on the need for collaborative effort among regulators and the industry, Sriram Chakravarthi, Counsel, Rajah & Tann Singapore LLP, said that “in order to create an effective regulatory framework, governments should collaborate with the crypto-industry and representative bodies, and consider international approaches – particularly on the cross-border aspects of crypto-regulation.”
Crypto exchanges had been sending information about cryptocurrency to the RBI since 2015.
