Indian Central Bank Being Pushed to Include Crypto in its Regulatory Sandbox
Technology industry lobby groups along with startup founders are asking the banking regulator, Reserve bank of India to include cryptocurrency in its proposed regulatory sandbox framework for the fintech industry, reported The Economic Times on March 16.
On April 18, the central bank of the country released its ‘Draft Enabling Framework for Regulatory Sandbox’ that excluded cryptocurrencies, initial coin offerings, and other related sectors. The regulator has invited comments on the guidelines from the stakeholders by May 8.
“Since crypto coins and
tokens are an important component of the blockchain technology, the draft regulations appear to exclude testing of smart contracts and other approved blockchain technology under the sandbox,” IT industry trade body Nasscom said.
The National Association of Software and Services Companies (NASSCOM) further said that by including these innovations RBI could get a better understanding of the risks associated with cryptos. It pointed out how regulators in countries like the UK allow them to be in their regulatory sandbox as well.
“The decision to keep cryptocurrencies, trading of cryptocurrencies and initial coin offerings out of the purview of the regulatory sandbox is still not clear.”
The Payments industry lobby group, Payments Council of India (PCI) says since there is no outright bank on
cryptocurrency technology, it should be a part of the sandbox.
“The boundaries can’t be defined right away. The discussion has been on how an open framework can be created instead of a subset of existing laws, because then we wouldn’t be achieving the innovation objective,” said Naveen Surya, chairman emeritus of PCI.
“Ideally, they shouldn’t have such large exclusions.”
Incrypt Blockchain said it had submitted a report on a blockchain-specific sandbox to the regulator that includes policies and procedure specifics.
Though last month, a report suggested that the country was considering a ban on digital currencies, India has yet to take a strong stance on the cryptocurrencies.