For any crypto enthusiasts in India, the creation of a regulatory sandbox was a moment of happiness. However, with the Reserve Bank of India releasing its framework for projects allowed in the regulatory sandbox, their joy was short-lived as RBI’s framework excludes any crypto related project.
Per the framework’s report, the regulatory sandbox (RS) has been set to check blockchain based projects whose applications revolve around several sectors. The regulatory sandbox provides space to startups using emerging technology such as blockchain to solve problems or create solutions that bring benefits to consumers.
Besides blockchain based projects being allowed into the RS, other projects allowed are machine learning applications, artificial intelligence, data analytics, digital identity software, and mobile-based payment projects. The projects will be tested on different aspects with RS provides a conducive environment to scrutinize the projects.
While although a regulatory sandbox provides a conducive environment to perform checks on these projects, for RBI its ban on crypto remains. Exclusion of the digital coins cements RBI’s previous decision on banning crypto.
The ban has led to some entities to walk out of India’s crypto space Zedpay is an excellent example of the effects of RBI ban. It was one of the biggest crypto related firm present in India.
Besides digital coins, traditional financial services, initial coin offering, crypto trading, investing and settling are also excluded from the RS. While although the regulatory sandbox provides projects with an environment to test the viability of their ideas on a small number of consumers, it also comes with some disadvantages.
Per RBI’s report, innovators may lose some flexibility and time. Moreover, completion of the tests in the regulatory sandbox successfully doesn’t guarantee innovators any future regulatory approval.
While the regulatory sandbox would have provided RBI with the perfect place to check out crypto related projects present in India, it’s quite a shame that the same projects aren’t allowed in the regulatory sandbox. Exclusion of the crypto related projects only means one thing, crypto enthusiasts will be making more rounds in India’s Supreme Court.
At the same time, it is also strange since the same bank responsible for the ban is looking to launch its coin.