Industry groups, fintech want Reserve Bank of India to consider including cryptocurrency in sandbox

Many technology industry lobby groups and fintech startups have urged the Reserve Bank of India (RBI) to include cryptocurrency and other related crypto-assets in the regulatory sandbox framework, the Economic Times reported.

“Since cryptocoins and tokens are important component of the blockchain technology, the draft regulations appear to exclude texting of smart contracts and other improved blockchain technology under the sandbox,” Nasscom, a trade association of Indian IT companies, said.

Nasscom argued that other countries like the United Kingdom are supporting such innovations in their sandbox, adding that including crypto will allow the RBI to gauge the risk involved in it.

“The decision to keep cryptocurrencies, trading of cryptocurrencies and initial coin offerings out of purview of the regulatory sandbox, is still not clear,” Nasscom said.

Other than Nasscom, the Payment Council of India (PCI) is also suggesting a more open structure, noting that cryptocurrency technology should be a part of the sandbox since there is no outright ban in the country yet.

“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,” PCI Chairman Emeritus Naveen Surya said. “Ideally, they shouldn’t have such large executions.”

Last month, the RBI became the latest central banking authority to establish a fintech regulatory sandbox. In its report entitled “Draft Enabling Framework for Regulatory Sandbox,” dated April 18, 2019, the RBI said it organized an inter-regulatory working group to check the different aspects of FinTech and its implications.

The testing of different applications of blockchain technologies, smart contracts, and artificial intelligence were included in the sandbox. However, it did not allow testing anything that involves cryptocurrency services, trading/investing/settling in crypto assets, and Initial Coin Offerings (ICO).