The Financial Technology industry in India has urged the bank regulators to review the cryptocurrency ban. Entrepreneurial ventures and the industry’s association groups have petitioned Reserve Bank to integrate enforcement regulators for Fintech startups that are not protected by current regulations.
The regulatory sandboxes are being used in the technology industry. They are used to test cryptocurrency and blockchain systems to ensure regulatory compliance and security checks for financial operations. The Sand boxes are important in the technology system because they will bring growth especially in Fintech startups.
The regulatory bodies of cryptocurrency will ensure strict financial regulations enabling the growth of Fintech industries in a way that it does not affect the industry by choking it with so many rules and also protect customers using the digital financial services from losses.
The process of collecting important, identifying information about the user of the service will be done by RBI’s sandbox which will begin with 10-12 selected organizations based on digital KYC where financial services are available to meet their needs and deliver in a responsible and sustainable way. The process should be completed within six months where the units will run at different periods and time.
The RBI will be an essential direction to the regulations that will provide new opportunities for customers, risk management and increased efficiency in the digital financial system while the regulatory sandbox will be used to measure bond’s price, sensitivity to changes in interest rates.
It is extremely unreasonable for India’s regulatory system on cryptocurrency, where it banned the use of digital currency and we are in an era of the digital world, where emerging industries provide financial services by making use of software and modern technology.
A Nasscom spokesperson from one of the lobbying groups in the Bitcoin ban in India said that the intention not to include cryptocurrency and initial coin offerings into the regulatory sandbox is in question because crypto coins and tokens are important components of the blockchain technology. Testing smart contracts to provide stakeholders with quality product and service information was not to be eliminated in the draft regulations.
Naveen Surya, the chairman of Payments Council of India (PCI) is one of the petitioners that are pushing the move to consolidate cryptocurrency in Financial Technology sandbox. He said that the dialogue was on how to come up with an open framework alternatively to the present subset of laws, making the new innovative system impossible due to stated uncertain rules.