India’s technology industry lobby and the founders of startups through Nasscom, the Indian trade association for the software and service sector, have asked the Reserve Bank of India to add cryptocurrencies in the regulatory Sandbox framework proposed earlier, as reported by Economic Times. The Central Bank of the country decided to keep out cryptocurrencies from the list of favorable Fintech technologies a month ago. Meanwhile, other technologies like the distributed ledger system for payment, smart contracts, and KYC are all part of the favorable list of financial technologies.
The Need for Cryptocurrencies
Nasscom has stated that as cryptocurrencies and tokens are an essential aspect of blockchain technology, their exclusion can be limiting to the use of approved technologies like smart contracts and other such revolutionary innovations. They have put forward the examples of regulatory sandboxes in countries like the UK that have not excluded such innovative tech and have urged Indian regulators to learn from them to be in a better position to assess the risks posed by these technologies.
Other Opinions on Crypto
The Payments Council of India, which is the payments industry lobby of India, has also asked the Reserve Bank of India to add cryptocurrencies and tokens to the regulatory sandbox framework for fintech.
However, there are different opinions on the present form of the regulatory sandbox. For example, the founder of Incrypt Blockchain, Nitin Sharma, has cited their research to delineate that access to a limited number of qualified digital assets is probably the best option. According to him, this way, India will be able to allow a lot of innovation and experimentation without inviting any significant financial risk for any stakeholder.
Prashant Garg, Partner – Data and Analytics for EY India, stated that blockchain can reap immense advantages for a vast country in terms of governance, multi-party transactions, and digital identity management. In this respect, the exclusion of only one aspect, namely cryptocurrency, will not have any significant effect.