From 2018, when the Reserve Bank of India (RBI) issued guidelines to banks to stop crypto trading, the Indian crypto market saw a series of struggle. And now the industry expects the Apex court to remove the ban and grant some relief.
The latest RBI framework has further made things more difficult. As it has kept out cryptocurrencies and ICO’s from the draft document. It has done so on “Enabling Framework for Regulatory Sandbox” for fintech companies.
Basically, Fintech means Financial technologies i.e computer programs used to support banking and financial services. ICOs are Initial coin offerings – funding using cryptocurrencies to companies.
RBI Disapproved Crypto Asset Testing
Finally, it was good news to see RBI draft a document on Fintech Regulation. This was something which was pending for a long time. A lot of crypto geeks in India were expecting this document would bring some sort of relief to the struggling crypto market in the country. But, the central bank kept cryptocurrencies and ICO’s totally out of the Framework for Regulatory Sandbox.
However, in the list of products and innovations, when Reserve Bank India included Smart contracts and applications under the blockchain technologies could be tested it came as a shock.
According to many experts, the crypto coins and tokens are an important part of the blockchain technology. Also, without them, it is really difficult to understand how smart contracts and other blockchain technology will be tested.
This step of RBI has made it clear that still central bank is not completely satisfied by cryptocurrencies. Also, it doesn’t want to approve them unless they are sure that they won’t be used for malicious activities.
By bringing this regulatory system, the RBI plans to provide an environment to new technology-led entities for testing of a new product or service so that it may or may not involve some relaxation before a wider-scale launch.
The crypto market in the country is unhappy with this exclusion of cryptocurrencies from testing in Regulatory sandbox. Now everyone is waiting for the apex court hearing on July 23, 2019, and hope it will revive the struggling crypto industry.