A regulatory sandbox was announced by the Reserve Bank of India just last month, for emerging technologies such as blockchain. It did not however include cryptocurrencies, Initial Coin Offerings, and a few other important topics of the moment.
Crypto is aspreading like a wildfire in today’s hyper-industrialized world. Every major economy of the world is trying to introduce more clarity regarding cryptocurrencies in the market today.
For those not familiar with the concept of a regulatory sandbox, here is what it is:
“A regulatory sandbox (RS) usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing.”
However, the exclusion of such important assets from the fintech sandbox could be detrimental to India’s economic climate. A new report in the Economic Times claims that Nasscom is allegedly pressuring the RBI to reconsider their legislative outcome and include cryptocurrencies in the the sandbox..
Nischal Shetty, the founder of WazirX claims:
“A crypto sandbox would have helped Indian entrepreneurs participate more freely in building blockchain based applications. What’s confusing is that the draft speaks about blockchain being allowed but crypto not being allowed. Now that’s a clear proof of the misunderstanding of blockchain. Without crypto, public blockchain projects cannot be built.”
According to the Nasscom, the motive behind RBI’s exclusion of crypto is still murky. The body was quotes saying:
“Since cryptocoins 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. The decision to keep cryptocurrencies, trading of cryptocurrencies and initial coin offerings out of the purview of the regulatory sandbox is still not clear.”
Additionally, the Payment Council of India (PCI) has also been trying to get RBI to take a serious look at crypto. Naveen Surya, chairman of PCI said,
“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… Ideally, they shouldn’t have such large exclusions.”
The ball is in the RBI’s court now, we just have to wait and watch what they do with it.