IndiaTech.org, the industry association representing interests of startup ecosystem’s founders and investors, has called for the registration of homegrown, locally registered cryptocurrency exchanges in a five-point policy framework aimed at crypto regulation.
The lobby group has proposed that cryptocurrencies should be given the status of digital assets such as gold and stocks instead of currencies/cash. Plus, there should be sufficient checks and balances through customer verification, well-defined reporting mechanisms, accounting standards to tackle suspicious activities, enable traceability of fraud transactions, terror funding, among other things, it said.
According to IndiaTech.org, its framework could address the government’s concerns associated with cryptocurrencies while ensuring that the country gets an opportunity to capitalize on the huge potential that the industry holds. It has shared the whitepaper with the Ministry of Finance, Ministry of Commerce and Industry, RBI, and Niti Aayog.
“India with the right monitoring regulations in place can create an avenue to participate in wealth creation opportunities in this new asset class that can be like gold in the future for the generations ahead,” the group said in the whitepaper.
“Allowing the crypto industry can also help India decrease the cost of capital for its SMEs and build an easier channel for them to provide their services to global customers,” it added.
In the framework, the group has also recommended to enable direct and indirect taxation of crypto to treat it as other current assets, permit disclosures, and regulate import. Further, it said that the government should allow innovative uses of crypto by businesses and create specific safeguards/frameworks to protect retail investors from token issuance.
It also emphasized on encouraging self-regulation in the industry, which would essentially define a code of conduct in alignment with the government’s primary objective of safeguarding consumers as well as financial stability until policies and laws are established.
Commenting on the framework, Rameesh Kailasam, IndiaTech.org CEO, said, “...IndiaTech.org has recommended ways in which concerns around taxation, transaction traceability, money laundering and others can be addressed by bringing about changes in exchange ownership parameters, customer KYC, FATF guidance’s, accounting and reporting standards, clear cut direct and indirect tax regulations, anti-money laundering aspects, import regulations, and suspicious transactions reporting.”
“We are hopeful that the Government will work with the industry to regulate the sector and that it will look at this emerging sector in a progressive manner. Introducing necessary checks and balances will ensure that India is able to embrace and adopt new-age technologies by adequately leveraging their potential,” he added.
IndiaTech.org’s members include internet companies Makemytrip, Ola, Inshorts, Dream11, and Hike as well as venture capital investors SoftBank, IDG Ventures, Kalaari Capital and Matrix Partners.