By CCN: Dominant Indian tech lobby, NASSCOM, is pushing the Reserve Bank of India to be inclusive with cryptocurrencies like bitcoin in its regulatory sandbox to shape the future of the country’s fintech industry.
NASSCOM, which represents the $154 billion Indian IT sector and is a powerful voice in the industry, is calling for the RBI to include crypto in its so-called ‘Draft Enabling Framework for Regulatory Sandbox’ after they shunned its inclusion in the official document on the framework, and excluded cryptocurrency, crypto trading and ICOs from testing.
A NASSCOM spokesperson said including crypto in the framework would help the bank better understand the risks and opportunities presented by cryptocurrencies:
Since cryptocoins and tokens are an important component of the blockchain technology, the draft regulations appear to exclude testing of smart contracts and other approved blockchain technology under the sandbox.
The decision to keep cryptocurrencies, trading of cryptocurrencies and initial coin offerings out of the purview of the regulatory sandbox is still not clear.
The call is backed by the Payments Council of India (PCI), which is also seeking a more open regulatory structure.
Naveen Surya, chairman emeritus of PCI, said:
The boundaries can’t be defined right away. The discussion has been on how an open framework can be created instead of a subset of existing laws, because then we wouldn’t be achieving the innovation objective. Ideally, they shouldn’t have such large exclusions.”
Clearer regulation could help millions
Nischal Shetty, founder and CEO of Indian crypto exchange WazirX, says including cryptocurrencies like bitcoin in the regulatory sandbox would help create wealth and millions of jobs for youths in India, and called for people to stand up and demand the government recognise the nascent industry.
@SecretaryDEA Please help our voices be heard. Positive crypto regulations in India will help create wealth and jobs for millions of Indians. Millions of youth in India want to see positive crypto moves by the government.
Jai Hind 🇮🇳
— Nischal (WazirX) ⚡️ (@NischalShetty) May 16, 2019
Top talent migrating away from India
The exclusion of crypto from the proposed framework and the government’s shifting position on the sector has left a lot of crypto business owners wondering what’s next for the industry on the sub-continent.
Indian Youth is looking up to you for positive #Crypto regulations.
Help India grow and innovate in this new technology!
Please create an atmosphere of inclusion for Cryptos.
— Shantanu Sharma (@Shaanush) May 16, 2019
Many have decided to close down and move to more favourable regulatory environments in Asia like Japan or Singapore.
Ramani Ramachandran, CEO of ZPX, a Singapore-based startup that is part of the framework of Bahrain’s central bank, said:
With Bahrain, the approach is that startups enter the sandbox and if their developments pan out, they are given licences to start operating,”
What’s wrong with crypto?
The RBI’s unwillingness to even consider including crypto in a draft framework suggests there’s a long way to go before India embraces cryptocurrency. The central bank specifically forbade the country’s banks from offering services to crypto startups, effectively a death kneel to crypto exchanges across the country.
The problem is this approach is driving India’s homegrown talent to countries that are more willing to embrace the opportunities that crypto brings.
The net result? India loses as innovative founders and start-ups decide to build their businesses elsewhere.