The Indian cryptocurrency market is teeming with entrepreneurs, funds, and tech know-how to create a vibrant crypto-ecosystem. Yet, it faces a crisis buoyed by slow-moving policies, wayward regulations, and difficult-to-please lawmakers.
This week, Ripple tweeted about its policy framework for pushing digital assets in India, a paper initially published in June that outlined four major steps that the local government could refer to while making frameworks for the market.
Fintech #regulation that sponsors #innovation & protects consumers is necessary for worldwide digital asset adoption. Check out our proposed policy framework for digital assets in India. https://t.co/RzwqogdilP
— Ripple (@Ripple) July 15, 2020
Four points outlined
The policy paper offers a global overview of the steps taken by governments elsewhere, such as the U.S., the U.K, and Singapore, and recommends both short- and long-term actions for the Indian government.
First is adopting a “digital asset taxonomy consistent with global practice.” This step involves providing clarity to the legal character of digital assets. India has struggled with this point historically; “banning” and unbanning cryptocurrencies several times while the country’s top regulators — the Reserve Bank of India (RBI) and the Supreme Court — differ on the legality of digital assets.
Next is to enact a facilitative legal framework for digital asset service providers at the Gujarat International Finance Tec-City (GIFT). GIFT is India’s first “operational smart city” combining technology with administrative functions that positions itself as a global business district.
Giving blockchain- and crypto-entrepreneurs a legal springboard could be helpful. “This can attract mature global participants to GIFT for developing enterprise use-cases of digital assets,” said Ripple.
The third is to modify the RBI’s Regulatory Sandbox Framework to remove “cryptocurrency” and “crypto-asset services” from the negative list. Doing so would ensure existing and p