The Reserve Bank of India excludes cryptocurrency projects
Saturday, 04 20 2019, Category: Technology, Country: India
The Reserve Bank of India (RBI) has announced the framework for its fintech regulatory sandbox. While the regulatory sandbox invites blockchain projects to take part, it excludes any cryptocurrency-related businesses—enumerating cryptocurrency services, trading, or Initial Coin Offerings in its exclusions list. RBI’s stand against cryptocurrencies is not something new—the institution has banned banks from dealing handling crypto-related transactions or providing services to cryptocurrency businesses.
The regulatory sandbox will provide fintechs with “an environment to innovative technology-led entities for limited-scale testing of a new product or service.” The companies will be able to “test the product’s viability without the need for a larger and more expensive roll-out.” However, it doesn’t come without a cost—when participating, innovators may lose flexibility and time. All necessary regulatory approvals are also expected from participants before wider adoption.
The RBI encourages fintechs to participate, especially when sufficient government regulations are not in place, temporary easing of regulations is needed, or the innovation may affect the delivery of financial services significantly.