In Brief:
- The Confederation of Indian Industries (CII) urged the government to treat the crypto or digital tokens as ‘securities’ of a special class.
- The industry body also suggested that CBDC should not be subjected to existing regulations.
- CII advised that a new set of regulations should be made considering crypto tokens’ decentralized nature.
Trade association Confederation of Indian Industries (CII) on Thursday addressed the government urging to treat the crypto as ‘securities’ of a special class. The statement has come at the time when the government is preparing to introduce legislation to Parliament.
The government is all set to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 which is scheduled for the current winter session of the parliament. The Bill seeks to ban all private cryptocurrencies in India, which is again a hurdle in a way to accept crypto.
Though the government will create a framework for the official digital currency to be issued by the Reserve Bank of India. Yet, the Central Bank Digital Currency (CBDC) might be subjected to provisions of existing regulations.
Considering all possibilities, the industry body also suggested that the government should consider forming a standing advisory council composed of representatives of policymakers, regulators, and other stakeholders who can provide advice on the complexities associated with the new asset class.
Also, CII recommended that a new set of regulations and guidelines would be appropriate as crypto or digital tokens are primarily known for their jurisdiction-less and decentralized character.
It further said that the regulatory authority could establish centralized exchanges and centralized custody providers backed by market regulator Securities and Exchange Board of India (SEBI). Additionally, they must follow KYC and anti-money laundering law compliance requirements that apply to financial markets intermediaries.
This way some regulatory bodies can be held legally accountable and liable for the safekeeping of the digital or crypto tokens in possession of participants stored in digital wallets offered by them.
The central bank is still indecisive on how to introduce CBDC. Today, RBI governor Shaktikanta Das showed concerns over cyber security and digital fraud associated with CBDC rollout. However, the government seems not to ban crypto nor legalize crypto as a tender but certainly regulate it.
