Not just India's top crypto players, the industry's leading names are constantly eyeing on Govt's view towards the emerging crypto industry. Earlier this morning, Ripple held a conference that discussed the policy framework for digital assets in India. Noticeably, Ripple released a 36-page long policy paper, proposing a policy framework for Digital Assets in India. 

The Path Forward for Digital Assets Adoption in India

Despite the Apex court removed the crypto banking ban in India in early March this year, the country is yet to determine the policy frameworks for the movement of virtual currencies and work mechanisms for trading platforms in India. On the other hand, the ever-growing population of India has grabbed the attention of a wide range of digital asset companies, the latest being Binance and OKEx.

Back in 2019, Ripple CEO, Brad Garlinghouse had issued an open letter which was addressed to the US legislators to support the new startups of FinTech companies across the country. The company claims that after the issuance of an open letter by the CEO, the congressmen have voiced out their support for the blockchain and it has made the regulatory board, the U.S. Consumer Financial Protection Bureau (CFPB) to draft a rule that will guide FinTech and digital assets companies in the country.

What is going on in India is not new to Ripple and it has pushed them to offer the same advice that was rendered to the United States last year. Ripple in a recently released policy paper, entitled, The Path Forward for Digital Assets Adoption in India urges; 

Indian policymakers to implement a regulatory framework that is technology-agnostic, principles-based and risk-adjusted

The official blog mentioned the words of CEO, Brad Garlinghouse and Co-founder, Chris Larsen for India - you have the world's attention. Let's come together and seize the moment.

Long Report in a Nutshell 

Ripple noted that India's central Bank Reserve Bank of India (RBI) had issued its very first warning about virtual currencies (VCs) in 2013. It also highlighted how it restricted banks and financial entities from providing services to anyone or any entity dealing with cryptocurrencies, further comparing with the global standard-setting bodies like the Financial Action Task Force (FATF) and progressive regulators like the Monetary Authority of Singapore (MAS) and United Kingdom (UK) Financial Conduct Authority (FCA). In contrast to RBI, these bodies shunned sledgehammer measures like bans and analyzed the progress of emerging industry and "created token taxonomies and risk-based proportionate regulatory frameworks". 

On a similar view, Ripple seeks to provide Indian policy-makers some of the similar recommendations and frameworks.

Ripple policy paper lists out policies India should adopt

* Provide the clarity on the legal definition to digital assets Â 

* Adopt a tax system that conforms with the global practice 

* Gujarat International Finance Tec-City (GIFT) is India's first operational smart city and international financial service center. Ripple urges regulators to enact a facilitative legal framework for digital asset service providers at GIFT to attract the global participants to this center. 

* RBI's regulatory sandbox has added crypto assets and cryptocurrencies in a negative list. Ripple proposes the modification in RBI's regulator sandbox and removes "cryptocurrencies" and "crypto-assets assets" from the negative list, thereby giving companies to test their technological capacity in the country.

* Amend a specific financial sector law dedicated for digital assets such as enable Securities and Exchange Board of India (SEBI) to license, regulate and supervise digital asset service providers 

Ripple Attempts to Dismiss the 'Blockchain, Not Bitcoin" Narrative 

Ripple believes that the Indian economy will bolster following the responsible usage of blockchain technology and digital assets within the country.

Now is the time for India policymakers to take the forward-looking approach that many other jurisdictions have taken, read the official blog post of Ripple.

More so, Ripple is trying to rub the narrative of Blockchain not Bitcoin as the policy report reads the true innovation for a DLT (Distributed Ledger Technology) lies in broad applications of programmable value and information - digital assets to DLT, more precisely Bitcoin to the Blockchain Protocol, XRP to the XRP ledger. Ripple went on to say that the digital assets have use-cases over and above the use-cases of a currency.

Moreover, DLT with native digital assets is far more consequential in the pursuit of certain social goals, and as such regulators should recognize their potential. 

In a detailed report, Ripple elaborates about the use-cases of XRP in the financial system and how it is resolving on-demand liquidity (ODL) issues. More so, the firm stresses that unlike other countries or the central bank of other countries, RBI uses VC, cryptocurrency, crypto-asset to refer digital assets and has not defined any legal character to the digital assets. On contrary, there are different terminologies or taxonomies of digital assets divided and determined by different countries including Singapore, United Arab Emirates, United Kingdom, Japan depending on how they view digital assets in their countries.

Why is Policy Frameworks on Digital Asset Essential? 

For example, let us assume that you have been hearing of a good investment from a company abroad and it finally comes to your country. When it does, you would want to take complete advantage of the situation. Here is where the policy framework in the country comes in, it would hinder the majority of the population from abusing the privileges of the new digital assets verdict. The policy framework is what Ripple's policy framework is trying to propose to check the activities of people when they buy, sell, and invest in digital assets.

Ripple's Managing Director for Southeast Asia, Navin Gupta has said that if the country approved digital assets and Blockchain, it would be a huge boost to their economy. Responsible usage of blockchain technology and digital assets can introduce the tremendous potential to the Indian economy", Navin said.

The new policy paper comes on the back of the Binance's latest announcement on joining IAMAI, India's association that helped overturn the crypto banking ban. 

With India touted as the next gold mine of digital assets, the framework would make it a realisation. We can keep our fingers crossed till the panel reconvenes and gives their judgment on the legality of digital assets in the country.