The financial industry is no stranger to technology compliance with regulatory requirements. Managing regulatory processes within tech has been termed RegTech or regulatory technology. This is used to cover innovative digital solutions via artificial intelligence, biometrics, machine learning, and big data so that compliance becomes efficient and aids regulatory reporting, compliance, and monitoring.
However, it is not just this quick-moving development of innovation that underpins the rise of RegTech. It is also the massive cost of compliance that affects the cost of doing business. India has a long way to go to adapt to all this digitization and disruption. There have been various disruptions, cryptocurrency being the most prominent one.
How will India absorb the potential of blockchain tech and its cross-sector applications? Will aspects such as trade finance be able to even adhere to monitoring obligations, even if India were able to quickly adapt to the RegTech revolution?
In the first dispatch of Mint’s Demystifying Regulation in Technology, industry experts deliberated on cryptocurrency regulations and what could be done in that regard.
One of the biggest dilemmas about innovation is not knowing whether or not such ideas would impact the world, said Sanjay Khan Nagra, partner, Khaitan & Co. The regulatory concerns around cryptocurrency are understood much better these days and so it is time to resolve them.
Another concern is whether regulators would understand the technology on a daily basis because this is an evolving technology. Nagra said governments can classify crypto the way they classified wallets.
Sudipta Bhattacharjee, partner, Khaitan & Co, raised concern about technology outpacing laws and regulation as these regulatory vacuums are hurting live technologies. A regulatory sandbox is needed because if useful disruptive technology is banned, it would be driven underground but wouldn’t disappear, Bhattacharjee pointed out.
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