Ripple Labs Inc., an enterprise blockchain firm offering remittance to banks and financial institutions at large, has offered the Indian government a regulatory template to be able to keep up with the trends in the emerging cryptocurrency world to help the country maintain good standard in the world of fintech.
Ripple, in the framework, concludes that the Indian government needs to speedily offer an all-encompassing regulation to the crypto industry without being biased.
The blockchain startup proposed that the Indian government has a standard digital assets regulatory framework based on three principles. Ripple says the regulatory framework should not compulsory citizens to use a particular technology over another. The framework advises that regulators should not treat financial services that embed Distributed Ledger Technology (DLT)/digital “as inferior to financial services” that makes use of old and archaic financial infrastructures.
It also suggests that the framework be based on principles, given the fact that technologies in the crypto space are always evolving.
In the third principle, Ripple says the regulatory framework should be open to adjustment as crypto poses potential risks. Doing this will limit the risks associated with the digital currency class, Ripple says.
Ripple wants the Indian regulators to adopt a digital asset taxonomy inline with the world’s ethics, by considering digital assets like Bitcoin, XRP, and Ethereum as payments/exchange token, while categorizing digital asset creating access right for availing service as utility tokens. It also enjoins that regulators name tokens that offer rights which mirrors traditional securities i.e. bonds and shares, as securities.
The financial blockchain solution provider wants the regulator to introduce a legal framework for cryptocurrency services at the Gujarat International Finance Tec-City (GIFT).
Ripple wants the Indian government to remove cryptocurrency and crypto assets services from the negative and demeaning list and give service providers the advantage to observe “the value proposition in Indian context.”
The framework enjoins the financial regulators to change the financial laws hindering the complete performance of crypto services in the country.
Ripple says before offering India a regulatory framework, it had surveyed the ones used by in Abu Dhabi Global Markets (ADGM), Japan, Singapore, United Kingdom, and South Africa.
Ripple is offering the framework after the supreme court of India ruled upturned the decision of India’s Central Bank that rendered cryptocurrency irrelevant in the country for close to two years.
A report confirms that the rule was made in favor of cryptocurrency exchanges and firms who are not satisfied with the action of the Reserve Bank of India (RBI). The action of the central banks made some crypto startups to fold up or relocate.
Now, Ripple is advising that the country avails itself of the opportunity and design a comprehensive regulatory framework to accommodate the emerging technology.