The process will benefit both companies and consumers, as well as it will allow a controlled evaluation of new technologies to create an adequate regulatory framework and protect its users

The Reserve Bank of India (RBI) announced, last week, the creation of a test environment for new platforms. The main objective of this public institution is to encourage the development of blockchain technology in the country, as part of the innovative moves towards the next financial technologies that the Government of India has been evaluating in recent years.

According to what the official announcement described, the test environment seeks to research, develop and apply the use of platforms and apps that use blockchain technology as part of different financial processes and also in other related uses.

In addition to this, it is emphasized that only blockchain technology will be allowed in the different tests and not the use of cryptocurrencies since these assets are not the objective this time. Therefore, any project related to the use of cryptoactives will be excluded from the test environment and subject to the corresponding regulations.

In India, as well as in other countries, applying “test environments” enables the companies which have developed something innovative to be evaluated closely and accurately by regulatory and legal bodies.

In this way, Indian companies launch their new products or services to a certain number of people, in order to provide them the novelty they have created for a limited time. This leads to a direct investigation which seeks to protect future consumers, as well as to guide legislators to create laws to regulate these activities in the country.

About this aspect, RBI representatives affirm this is a healthy practice for all the sectors. It benefits consumers to protect their assets, and also benefits the technology companies which hope to expand their projects.

For this reason, the announcement made by RBI will help companies related to blockchain technology to “prove the viability of a product without needing a larger and more expensive implementation”. It also will help the general population to “reduce costs and get better access to financial services”.

Although this project could motivate entrepreneurs, consumers, and investors, the publication also highlights that applying this idea can also imply a considerable waste of time and flexibility of movements; this is, since after entering the process it is not guaranteed that all possible sectors and alternatives to use these technologies will be tested. The test does not establish a regulatory framework that could be approved later.

In the test environment announced by RBI, not only companies linked to blockchain technology will participate. “Innovative technologies” will also be tested, inter alia, mobile payment services, digital identity software, artificial intelligence (AI), smart contracts, apps.

On the other hand, not only everything related to cryptocurrencies will be excluded. Otherwise, any cryptocurrency exchange or investment service will be left out, as well as all services and products already prohibited and regulated by the laws approved by the Government of India.

By María Victoria Rodríguez

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