Crypto industry body IndiaTech has recommended an evolved approach to Know Your Customer (KYC) guidelines as well as for cryptocurrency exchanges to share customer details with each other to map all users engaged in crypto transactions in India.
This was done following the crypto community’s first-ever meeting with the Reserve Bank of India (RBI) earlier this month, people familiar with the development said.
IndiaTech also suggested developing a central filtration process that allows only certain coins to be listed. At present, crypto exchanges have an internal framework to determine which coin to list.
The recommendations assume significance amid speculation of a ban on trading of virtual currencies and growing concerns around customer protection and anti-money laundering activity. The government is set to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for consideration in the upcoming winter session of parliament.
“Given the current situation, crypto exchanges are willing to work on a common data sharing practice if that assuages the government and regulators,” a person aware of the discussions said.
The suggestions have been drawn up by evaluating and comparing the Financial Action Task Force (FATF) recommendations and other KYC requirements and practices followed in the country.
“We have been constantly giving inputs to the government after the release of the White Paper over multiple things in the last few weeks,” said Rameesh Kailasam, president and CEO of IndiaTech. He did not comment on the specifics of the recommendations to and discussions with the RBI. “There are a lot of dependencies that came out of the process, and we have shared our recommendations with the regulator as well as the government.”