Crypto Firms Barred From Indian Central Bank Fintech Sandbox
The central bank of India has confirmed its decision to set up a fintech sandbox. Interestingly, this is believed to include the likes of blockchain startups and even tools. Unfortunately, projects or companies that have something to do with cryptocurrency will not be included.
Finalizing The Sandbox
According to the official report, the country’s Reserve Bank of India or RBI published its very own draft framework specifically designed for a regulatory sandbox. It is worth noting that this move is not entirely new, as it has been under development for more than three years already. This was first brought to the public after being able to develop a working group dedicated to finding fintech solutions.
The aforementioned financial service will be launched under the jurisdiction of the RS. More importantly, it will offer new and/or emerging technology, as well as utilize an already existing tech but in a more innovative way. What is more, the draft suggests that this service would be able to either address the problem or bring substantial benefits to consumers.
There is a huge advantage to operating a sandbox. For starters, it providers regulators the much-needed support (i.e. the RBI) when it comes to understanding new technologies. Even more so, it can cultivate innovation at a much better rate.
All applications that will be under blockchain technologies will be listed as a means of “innovative” tech. In addition, they are also expected to fall within the parameters of the sandbox, as per the draft. The same thing can be said for applications that have something to do with smart contracts.
Excluding Crypto-Related Projects
The only catch, however, is that the sandbox will not necessarily entertain projects related to cryptocurrency. This is, obviously, a huge disappointment in the crypto space. These projects include the likes of cryptos and crypto-related services, as well as crypto investing, settling, and trading. Apart from these, the sandbox will not cover ICOs and a handful of traditional financial services.
For products and/or services that have been deemed banned in India, they are also not eligible for participation in the sandbox. The central bank, however, is interested in projects that are concerned with retail payments, digital identity, financial inclusion, mobile payments, and money transfer services, among others.
Looking down at crypto-related projects is nothing new to the RBI. In fact, it has already banned banks in the country when it comes to performing businesses related to crypto startups.