Could Ripple’s policy framework help regulate cryptocurrency in India?
It is very difficult to say in advance whether the Government of India will ban the crypto industry. However, the rumor of complete ban on cryptocurrency has been emerged again after The Economic Times published an article regarding crypto ban in India.
The Indian crypto industry has already handled a ban imposed by RBI (Reserve Bank of India) in April, 2018 which prevented all banks from making transactions with crypto exchanges. The ban affected several crypto companies. Zebpay was one of them who had stopped operation due to the ban on banking transaction. Not only crypto industries, crypto users were also affected by RBI ban on banking transactions with crypto exchanges. They were not able to make direct deposit and withdrawal from crypto exchanges. I was also facing the same problem here.
Then I found Wazirx exchange who started P2P markets that resolved cash deposit and withdrawal at that time. Before joining Wazirx I had account in Unocoin, but after the RBI ban, I joined Wazirx to get the facility of P2P markets. I still have my account in Unocoin. However, I haven’t logged in the site since 2018 because it didn’t take the step to implement P2P market at that time.
After that several crypto companies went to court against the ban imposed by RBI and showed their endeavor until India’s Supreme Court revoked the ban on the use of cryptocurrency in India. But the matter was not finished here. It was sure that the Indian government will either reconsider the old draft bill or prepare a new one. However, it seems that the time has come. Last week, The Economic Times published an article regarding a draft bill that would not only impose a comprehensive ban on the use of cryptocurrency, but also send the person into the jail with a fine who possess and deals in cryptocurrency in India.
When Ripple got the information about the draft bill, they came with a new proposal to present in front of Indian legislators so that they could think to regulate crypto industry instead of banning its operation. Simply, we can say that Ripple wants the Indian government to regulate cryptocurrency so that their product called On-Demand Liquidity (ODL) service could be launched in the country. Ripple’s policy framework contains every information regarding On-Demand Liquidity service and the measures that can help regulate crypto industry in Indian territory. ODL service will mainly involve in cross-border payments in the country for which Ripple will use his digital asset XRP. However, they have clarified that the sender or receiver will not possess or deal with the asset during payment processing. What I understood that the sender or receiver will deal with their native currency which will be converted into XRP during cross-border payment.
Though it ultimately depends on Indian government whether they will accept the proposal, Ripple is trying hard to introduce their framework to Indian officials.
“A lot of what I am doing […] is meeting with regulators, meeting with very senior people at banks and explaining to them how crypto can be used–specifically XRP–can be used to solve a real problem, not to circumvent regulation,” he said.
“[…]Once people understand that, they very quickly become disarmed–[‘crypto’] is no longer a bad word.”
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