Crypto collective to reach out to Finance Minister, RBI to address concerns

Crypto collective to reach out to Finance Minister, RBI to address concerns

BENGALURU: Several cryptocurrency exchanges operating in India plan to jointly reach out this week to the country’s top financial decision makers, including Finance Minister Nirmala Sitharaman and the central bank, to suggest solutions aimed at establishing the investment credentials of an asset class that faced stiff regulatory resistance in the past.

Nischal Shetty, cofounder and CEO of the crypto exchange platform WazirX, said that the Blockchain and Crypto Council, a subcommittee under the Internet Mobile Association of India, has drafted a presentation note. ET has reviewed the note with recommendations on how to regulate crypto and address risks associated with cryptocurrencies, such as money laundering, the threat to rupee, and the industry’s environmental impact.

This presentation will also be shared with the Department of Economic Affair and the Ministry of Electronics and Information Technology, Shetty said.

On February 24, central bank governor Shaktikanta Das reiterated his concerns over cryptocurrency and advocated a ban.

“We have certain major concerns about cryptocurrency. We have communicated them to the government,” Das said in a TV interview. “..on crypto we have major concerns from a financial stability angle which we have shared with the government.”

Shetty, who is part of the push along with six other exchanges, said that the crypto exchanges have used the last two months to understand the concerns of the officials and come up with a comprehensive set of solutions.

The presentation note includes a code of conduct for crypto exchanges to follow on day-to-day operations, a white paper that highlights the possible effects of the proposed ban on crypto assets in India, and solutions to address risks associated with the industry.

One of the solutions to address the perceived threat to the rupee from crypto could be a regulation that crypto cannot be used for payment in the country, Shetty said, a regulation that has been adopted in several other geographies.

“Eventually, our hope is that we will be invited where we can present our case formally. But we did not want to wait, we wanted to take a proactive approach,” he said.

Between 2015-2018, Unocoin and ZebPay reached out to the RBI four to five times to mitigate concerns.

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