Ripple proposed recommendations to Indian lawmakers in response to the supreme court’s verdict on digital assets
Not long ago, the India Supreme Court reversed the Indian Reserve Bank’s cryptocurrency ban. However, India does not propose a policy framework on how to legalize this area. Therefore, things are still very vague. Until now, Ripple has officially entered the Indian cryptocurrency market. They even published a whitepaper outlining a proposed legal framework for digital assets in India.
We’ve published a policy paper to provide Indian legislators with recommendations for transparent digital asset regulatory frameworks. Read more on Insights. https://t.co/VfOMJvs9Pz
— Ripple (@Ripple) June 18, 2020
In the absence of a legal framework, Ripple is proposing a solution in a new whitepaper
Ripple’s proposal framework will address the lingering uncertainty in India’s cryptocurrency market. While the country’s supreme court overturned the Reserve Bank of India’s decision to ban cryptocurrencies on constitutional grounds, the government can’t ban what commodities one chooses to hold – it didn’t follow up by creating a legal framework for crypto in the country.
According to RBI, its member banks are not prohibited from doing business with cryptocurrency companies. But, banks are still particularly worried about the lack of a comprehensive legal framework, often refusing to deal with cryptocurrency companies as customers. Now, India’s cabinet is said to be considering a complete ban on cryptocurrencies.
To meet regulatory concerns, Ripple policy proposal includes a digital asset taxonomy consistent with global practice, and a modification to the RBI’s Regulatory Sandbox Framework to remove cryptocurrency and crypto-asset services from the negative list.
In particular, Ripple also provides an overview of the global digital asset context and the proposed measures that policymakers can take in the short and medium-term for administrative issuance. Comprehensive digital asset book in India.
- Adopt a digital asset taxonomy consistent with global practice — providing clarity to the legal character of digital assets.
- Enact a facilitative legal framework for digital asset service providers at the Gujarat International Finance Tec-City (GIFT) in the short term — to attract mature global participants to GIFT for developing enterprise use-cases of digital assets.
- Modify RBI’s Regulatory Sandbox Framework to remove “cryptocurrency” and “crypto-asset services” from the negative list — thereby offering service providers an opportunity to test the value proposition of this new technology in the Indian context.
- Implement a conducive regulatory framework for digital assets by amending specific financial sector laws — for example, empower the Securities and Exchange Board of India (SEBI) to license, regulate and supervise digital asset service providers.
Indian cryptocurrency exchange CoinDCX agrees that regulation is the right way to eliminate bad actors and ensure liquidity in the market. The best remedy is to adjust the exchanges because when the banking ban is lifted, a lot of exchanges will be issued.
CoinDCX founder and CEO Sumit Gupta said:
“India’s domestic crypto market opening up would lead to an influx of new investment. This will drastically improve the overall economy, and we will see a lot of innovative businesses coming out of India soon.”
We still have to wait for clarity from Indian legislators
The Indian parliament will return to the session in July and legalize cryptocurrencies will undoubtedly be favorable. Despite the lingering uncertainty over crypto’s legal status in India, Ripple is confident that lawmakers in the country will see the economic advantage of smart regulations and create a framework that is conducive to growth.
Navin Gupta, Ripple’s managing director for Southeast Asia, stated:
“Responsible usage of blockchain technology and digital assets can introduce tremendous potential to the Indian economy. Under a clear regulatory framework, individuals and businesses can confidently take full advantage of and operate within a safe environment that encourages the use of innovative technology.”
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