Indian lawmakers proposing a blanket ban on cryptocurrencies are getting it all wrong according to the country's IT industry lobby group, Nasscom.
Nasscom according to a local news report, stated on Tuesday addressing a bill introduced last week by an Indian inter-ministerial committee headed by Economic Affairs Secretary Subhash Chandra Garg.
The draft bill proposed a ban on the use of cryptocurrencies in the country, an action that Nasscom has strongly advised the Indian government against taking.
Nasscom labeled a possible ban as "not the most constructive measure," and called on the Indian government to instead work towards "developing a risk-based framework to regulate and monitor cryptocurrencies and tokens."
A ban, according to Nasscom, would only be the final way to stop India from benefiting from any of the new use cases that the emergence of cryptocurrencies and tokens can offer to the economy.
Rather than miss out entirely, Nasscom proposed that the country launched sandboxes for crypto startups and at the same time create a regulatory framework that will constantly monitor and prevent illegal activities in the industry.
Such an approach will keep the country in good stead in many ways.
For instance, Nasscom highlighted that law enforcement agencies would become better equipped to understand these new technologies and have the ability "to gather intelligence on criminal developments and take enforcement actions."
Conclusively, the IT industry lobby group praised the committee for identifying the potential locked into blockchain technology and promised to collaborate with the Indian government to figure out ways it could adopt the cutting edge invention.
Hopefully, India would consider Nasscom's input before making a final decision on a bill that can have adverse consequences on an already handicapped crypto ecosystem developing in the country.
In April, we reported that startups launching crypto-related products were excluded from a sandbox launched for fintech companies by the Reserve Bank of India (RBI).