A blanket ban on crypto currencies will only lead to its use for harmful purposes, an industry body has warned.

Such a ban will encourage non-state players to use it for their transactions, leading to more unlawful use of such currencies, the Blockchain and Crypto Assets Council (BACC) said. The body represents crypto exchanges in India and is an affiliate of the Internet and Mobile Association of India.

It said it supported the use of crypto-currencies only as an asset.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 would be tabled in Parliament at the Winter Session starting Monday.

According to the Bill, India is set to prohibit all private crypto-currencies. However, it will allow some exceptions to promote the underlying technology. The decision has led to confusion among crypto investors.

“The Council has always argued in favour of prohibiting the usage of private cryptocurrencies as a currency in India by law since usage as currency is likely to interfere with monetary policy and fiscal controls,” the BACC said.

“On the other hand, the Council has advocated their use only as an asset. The Council believes that a smartly regulated crypto assets business will protect investors, help monitor Indian buyers and sellers, lead to better taxation of the industry, and limit illegal usage .”

The BACC said it had listed several negative outcomes of a ban such as zero accountability and traceability of the origin and end usage of the cryptocurrencies, besides a complete evasion of taxes. A ban will also adversely impact retail investors.

“Crypto exchanges based in India offer an effective instrument of monitoring and are dedicated to creating an ecosystem that guarantees investor protection besides bringing both the investors and exchanges under proper tax laws,” the BACC said.

“The Council believes that the efforts of the exchanges should be supported by a law that should enable them to provide safer services to investors and fair taxes to the government,” it said.