An internet startup association in India has asked the government to define cryptocurrencies like Bitcoin as digital assets and not currencies.
IndiaTech.org, an industry association representing India’s consumer internet startups and investors, wants to provide clear definitions for the cryptocurrency industry.
On Wednesday, the association released a white paper including a policy proposal with recommendations for a regulatory framework for crypto assets and crypto exchanges in India.
The proposed framework suggests to define cryptocurrencies like Bitcoin (BTC) as digital assets and not currencies. “Define cryptocurrencies as digital assets and not currencies and grant them recognition as digital assets like gold, stocks, or marketable securities,” the proposal reads.
The framework further recommends introducing a registration system for India-based cryptocurrency exchanges as well as establishing necessary checks related to Anti-Money Laundering compliance, Know Your Customer verification and reporting. The proposal also points out the need for necessary provisions in India’s tax law, as there is no clear framework for taxing crypto in India.
The white paper also stresses the need to establish a framework for token issuance in India and regulate crypto in the payments industry. IndiaTech also proposed to encourage self-regulation to define a code of conduct for the industry.
IndiaTech CEO Rameesh Kailasam said that the crypto industry holds huge potential for Indian startups. “The foremost need today is for this sector to be granted the much-needed regulatory clarity that it has been seeking. We are hopeful that the Government will work with the industry to regulate the sector and that a progressive approach is adopted while doing so,” he said.
Sumit Gupta, co-founder and CEO of major local crypto exchange CoinDCX, called on the government to define the true nature of crypto in India. “This effort by the IndiaTech team is truly commendable. It helps bring a fresh perspective to the regulatory discussions that are going on today. The recommendations if accepted will open immense potential for Indians to participate in this new global asset class,” Gupta stated.
As previously reported, there is significant uncertainty regarding the legal status of crypto in India, with many anonymous sources spreading rumors of plans to ban crypto in the country. Finance minister Nirmala Sitharaman then said that regulators did not want a complete prohibition and were willing to allow “certain windows” for people to use digital assets like Bitcoin.