Reserve Bank of India publishes its draft framework for a regulatory sandbox for blockchain startups and tools, but excludes any cryptocurrency-related projects (Nikhilesh De/CoinDesk)


India’s central bank is setting up a fintech sandbox that may include blockchain startups and tools – but notably, explicitly excludes any cryptocurrency-related projects.

The Reserve Bank of India (RBI) published its draft framework for a regulatory sandbox on Thursday, a move that comes nearly three years after it first formed a working group to look into fintech solutions.

“The proposed financial service to be launched under the RS should include new or emerging technology, or use of existing technology in an innovative way and should address a problem, or bring benefits to consumers,” the draft says.

Operating a sandbox helps regulators such as the RBI to better understand new technologies, while still spurring innovation, according to the document.

“Applications under block chain technologies” is listed as a form of “innovative technology” that may fall within the sandbox’s parameters, the draft says, as do applications related to smart contracts.

However, the sandbox will not entertain any crypto-related projects. These include cryptocurrency or crypto asset services; crypto trading, investing or settling; or initial coin offerings, as well as a few more traditional financial services, according to the document.

(Any products or services which are already banned in India will likewise not be eligible