India wants to compete with international financial centers (IFCs) such as Singapore, Dubai (DIFC) and the Abu Dhabi Global Market. Hence, in 2019 it created its own International Financial Services Centre (IFSC) in GIFT City, Gujarat. Now the local regulation authority IFSCA is conducting a consultation on DLT and its use in Real World Asset (RWA) tokenization. It wants to consider the design of secondary markets for tokens from first principles.
The regulator was keen to emphasize that the dialogue only covers tokenization and not cryptocurrency. IFSCA doesn’t plan to permit the trading of cryptocurrencies, so it went so far as to threaten legal action if the consultation was misconstrued!
The IFSC’s consultation is very open, posing a series of questions rather than being prescriptive. Hence, if the next step is to outline the IFSC’s preferred path, the process may require more than one round of consultation.
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