Indian markets regulator the Securities and Exchange Board of India (SEBI) has been considering taking a "regulatory sandbox" approach towards the use of emerging technologies such as artificial intelligence (AI) and blockchain in order to create innovations in the securities market, news agency the Press Trust of India reported.
The regulator's decision seems to be influenced by the regulators of foreign nations who are also using a similar approach in adopting the new technologies.
According to the report, Sebi officials believe that innovations such as using blockchain for claims settlements, robo-advisory, e-wallets, resolution of complaints and more can be easier implemented using the sandbox approach.
The sandbox model will allow Sebi to assess and test the technologies and also grant exemptions from the law for a specific time period, the report added.
Sebi's board will first review the proposal and will then be sent to the Finance Ministry, which will have to then amend the Sebi Act so that the regulator can set up a platform tailored to the sandbox approach, reported PTI.
It further stated that the Finance Ministry is largely in favour of the approach.
Interestingly, a lot of cryptocurrency companies operating in India have been suffering from a blanket ban by the banking regulator the Reserve Bank of India (RBI) since April last year after it asked all banks to stop transactions with any companies dealing with cryptocurrency.
Even before the RBI had announced its diktat, Union Finance Minister Arun Jaitley during his budget speech had said that while the government would welcome blockchain as a technology, it would still not accept cryptocurrency as legal tender.
The finance minister's statement had created a storm with some interpreting his statement to mean that cryptocurrencies were declared illegal in the country and some saying that it didn't. However, the RBI's ruling put an end to that debate.
The RBI's directive also saw a few companies and crypto traders move the Delhi High Court and the Supreme Court to challenge the ban showing causes such as right to conduct business among others.
While the court has not yet reached a verdict on the issue, several cryptocurrency exchanges such as Zebpay and Unocoin have had to stop trading operations.