India IT industry participants have urged the Reserve Bank of India (RBI) which serves as the nation’s financial authority to reconsider its decision to exclude crypto-related products from its fintech regulatory sandbox proposal announced in April.
In that proposal titled “Draft Enabling Framework for Regulatory Sandbox,” the RBI had clearly stated that it would not allow startups working on ‘crypto assets, Initial Coin Offerings, and any product/services banned by Indian regulators’ to take part in the program.
However, such discrimination is unfair according to Nasscom, a trade association of India IT industry participants. For one thing, Nasscom pointed out that other countries (Bahrain inclusive) allow crypto-related startups to take part in the regulatory sandbox.
Next, the trade association suggested that given the RBI’s insistence that the crypto industry was a high-risk sector, allowing startups in the space to take part in the sandbox would enable the regulators to develop a better understanding of the risks.
IndiaTimes quotes Nasscom as saying regarding the RBI proposal,
“The decision to keep cryptocurrencies, trading of cryptocurrencies and initial coin offerings out of the purview of the regulatory sandbox is still not clear.”
Another industry group, Payments Council of India (PCI) also called against the exclusion of crypto startups since there is no outright ban on the industry. PCI’s Chairman, Naveen Surya reportedly said,
“Ideally, they [the RBI] shouldn’t have such large exclusions.
Lastly, Incrypt Blockchain, a local blockchain startup, suggested that instead of outrightly excluding crypto startups from the Sandbox, it submitted a report asking the RBI to consider setting up a blockchain-specific sandbox.
Incrypt’s CEO, Nitin Sharma argued that such an approach would allow “certain qualified digital asset startups” to participate, thus, letting India experiment with the technology without worrying about “any significant risks.”
Time will tell whether the suggestions made by these IT industry participants will prompt the RBI to reverse its earlier stance. Meanwhile, India’s crypto regulatory rumble continues with some reports suggesting an outright ban on the industry is imminent and others saying otherwise.