Indian Trade Association ‘Nasscom’ Pushes for Crypto Asset Regulation and Legal Certainty
The Indian National Trade Association of Software and Services Companies, also known as Nasscom, recently released a report pushing for more regulation of the crypto industry. Improved legal clarity may allow for more investment in the sector and it could drive growth as well.
Nasscom held a Technology and Leadership Forum a few days ago, during which Sangeeta Gupta, the association’s vice president, discussed highlights from a report written by the association and management and consulting firm Avasant.
The report discusses the country’s blockchain and cryptocurrency industries and posits that there is a need for more regulatory certaint. As the report explains,
“A proactive, consultative, and defined regulatory approach to blockchain will boost the blockchain ecosystem growth in the country. Industry participants in India are constrained due to the cautious regulatory approach taken with respect to specific elements of blockchain, such as cryptocurrency and digital assets.”
The association describes itself as a non-profit organization that is the:
“apex body for the 154 billion dollar IT BPM industry in India, an industry that has made a phenomenal contribution to India’s GDP, exports, employment, infrastructure, and global visibility.”
The association’s initiatives, as listed on its website, are “Liaisons with government and industry to influence a favourable policy.” Concerning the report, it also discussed that timing is key. As the report explains:
“India needs to act fast and work consultatively with the key stakeholders in the crypto/blockchain community and provide regulatory certainty and clarity around blockchain technology (specifically around cryptocurrencies and digital tokens).”
Moreover, even though there has been investment in blockchain, India has received less than 0.2 percent of it. The report continues,
“Investment through VC firms or ICOs in the blockchain ecosystem in India has been considerably low (totaling to USD 8.5M) due to the uncertain policy and regulatory environment in the country. Some of the initial, sizeable investments in India were on crypto exchanges such as Unocoin and Zebpay, which have now disabled trading through fiat currency due to an RBI directive . . . A restrictive regulatory environment in India is limiting the investment opportunities from both domestic and global investors into Indian start-ups.”
Moreover, due to the absence of regulatory certainty, the report explains that startups have been establishing themselves in other countries, such as Singapore, the United Kingdom, and Malta to
“limit their exposure to regulatory risk associated with the use of digital tokens or assets in India.”
The report also describes the Indian government as being:
“hawkish on cryptocurrencies” and that there is “no explicit legal framework around ICOs or digital tokens/crypto-assets.”
As a result, there has been a shutdown of prominent cryptocurrency exchanges in the country. As things stand, the report is pushing for more oversight, clarity, and regulations, which may drive more growth and success for the industry. Whether any change will actually happen, though, is another matter entirely.