‘India should consider regulatory sandbox on crypto’
Is cryptocurrency inevitable option
- Regulators may permit certain relaxations for limited purpose of testing
- Keeps fingers crossed over how India’s crypto policy evolves in near future
- India should balance innovation with risk management
- And adapt advancements in blockchain technology
New Delhi: India should consider a regulatory sandbox approach to deal with issues related to crypto products and services, economic think tank GTRI said in its report on Sunday. Regulatory sandbox usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain relaxations for the limited purpose of the testing.
The Global Trade Research Initiative (GTRI) said that in the light of crypto’s acceptance in the regular financial system in the US, it remains to be seen how India’s crypto policy evolves in coming months. With the new US action, with ramifications on global capital flows, price of gold, foreign trade, it may not be possible to live with no regulation, it said.
The report said: “India may consider adopting regulatory sandbox approaches, allowing for controlled testing of innovative crypto-related products and services. It may need to balance innovation with risk management and adapt advancements in blockchain technology.” It added that any approach must factor the core issue that the anonymity of crypto currencies can be exploited for illicit activities like money laundering or financing criminal organizations. The US regulation so far does not deal with this core issue, the report said.
Ajay Srivastava, Co-Founder, GTRI, said: “Despite these uncertainties, a crypto market exists in India through peer-to-peer trading and offshore exchanges. However, investors face risks due to lack of legal safeguards.”
