The Blockchain and Crypto Assets Council (BACC), part of the Internet and Mobile Association of India (IAMAI), has pitched for the setting up of a regulator to oversee the crypto industry.

In its written submission to the Parliamentary Standing Committee on Finance, the industry body has also made a case for a Self Regulatory Organisation (SRO) to be allowed to be set up, said sources close to the development.

One of the critical requirements is that such an SRO should be endorsed by the regulator for effective functioning, BACC is understood to have submitted.

Taxation issues

The SRO should be allowed to undertake activities around Know Your Customers (KYC), prevention of money laundering, and also issue guidelines on crypto advertising.

The crypto industry has also sought clarity on the tax issues around the buying and selling of crypto tokens (trading and investment) and how it would be treated under FEMA law. BACC is also understood to have pitched for the licensing of crypto exchanges so that concerns around investor safety could be better addressed.

India has seen an exponential rise in the adoption of cryptocurrency, with more than 15 million Indians holding crypto assets, according to industry estimates.

Earlier this month, responding to concerns regarding misleading crypto ads, Finance Minister Nirmala Sitharaman had stated in Parliament that the government is studying ASCI guidelines so that it could look at the decision on handling the issue.

When contacted, Manisha Kapoor, Secretary-General, ASCI, said: “We are in active talks with all stakeholders, including the government, on this issue. ASCI’s main concern is with consumer protection, and we are collaborating with stakeholders to establish that for this category.”

BACC is also in regular discussions with the ASCI on the issue of advertisements, said a source in the crypto industry.

It maybe recalled that crypto industry representatives had met the Standing Committee on Finance on November 15. On Thursday, some of the Standing Committee members met and a fresh set of questions are understood to have been posed before the BACC. The crypto industry has already made a round of detailed written submissions to the Standing Committee on Finance, post- November 15.

If one were to go by past precedents, it is not necessary for the government to go by the recommendations or stand of the Standing Committee on Finance.

Anxiety builds up

There is tremendous anxiety among crypto industry stakeholders on how the Crypto Bill, slated to be introduced in Parliament in the ongoing Winter session, will play out. There is definitely a clamour to treat cryptocurrency as an asset and not as currency. Also, the industry is hoping that there will be no blanket ban on private cryptocurrencies.

BACC has been formed with the vision of doing public advocacy for the crypto industry in India and to increase awareness about crypto and provide industry guidance. All major crypto exchanges are members of this industry body today.

BACC is co-chaired by Ashish Singhal, Founder & CEO of CoinSwitch, and Sumit Gupta, co-founder and CEO of CoinDCX.

The industry body is understood to have conveyed to the standing committee that the crypto tech was not looking to replace or compete with sovereign currencies, but only co-exist with them.

The crypto industry has also maintained that latest developments on crypto tech will not have any material impact on monetary policy.