Komal Joshi · Oct 20, 2020 . 6min read
Indian Prime Minister’s office Announces Opportunities in Blockchain. Will Crypto be a Reality in India?
The PMO's office intimated about different opportunities in India apart from the tech sector, assents adoption of frontier technologies like Blockchain
By Shilika · Jul 23, 2020 . 13min read
On 22nd July, the Indian Prime Minister, Narendra Modi’s office notified about how India is a land full of opportunities. It further informed about how India is a huge market for various sectors. In one such instance, the former tweeted about how the tech sector is booming in India. The number of rural internet users has surpassed urban internet users in terms of consumption and usability.
The PMO’s tweet intimated about how the opportunities in India are not just restricted to the technological sector. India is keen on adopting emerging technologies in the field of big analytics data, 5G, Internet of things, Blockchain technology, and much more.
The emergence of Blockchain technology has helped various countries in terms of easing operations. The use cases of blockchain are not just limited to the financial sector but also to the non-financial sector. The non-financial sector includes industries in the retail, health and pharmacy, telecommunications and public sector domains. It is helpful in warranty receipts, supply chain management, maintaining patient records, roaming frauds, and land registrations respectively. Whereas in the financial sector it dominates capital markets, insurance, and banking industry. The most luminous amongst all is the use case of Cryptocurrencies and Decentralized finance. While India is keen on introducing Blockchain in the non-financial sector, it is quite sceptical in case of the financial sector.
Cryptocurrency Regulation in India
The Reserve Bank of India (RBI) has been monitoring cryptocurrencies since 2013. However, in April 2018, RBI passed a circular that restricted the dealing in cryptocurrencies. The circular further informed all RBI regulated entities and financial institutions to prohibit working with crypto. It provided them with a time frame of three months in order to wind up existing accounts. However, the Securities and Exchange Board of India (SEBI) remained silent on the stance. Meanwhile, in March 2020 the Supreme Court of India quashed the circular that prevented RBI regulated entities to deal in cryptocurrencies. Shortly after a little over two months in July 2020, the Finance Ministry proposed a law that would ban private cryptocurrencies. Therefore a high-level panel has discussed upon the nuances of the same. It is said that anybody dealing in cryptocurrencies would be punishable under the law. Moreover, the draft bill stated that the accused could serve up to 10 years of imprisonment along with a fine up to 25 crores.
India’s progress towards Blockchain & Crypto
Even though the Indian government has been stringent about crypto adoption, several measures were taken to progress the crypto ecosystem in India. The Telangana government initiated project T-Block Accelerator. It decided to set up the first incubator to support startups working in the blockchain space. The T-Block Accelerator is a four-week long program that heeds mentorship to blockchain startups. The Telangana government also proposed a blockchain policy that would assist Hyderabad based startups on the regulatory and policy support front. Moreover, a blockchain district has been set up by the Telangana government with Tech Mahindra as a founding member. This aims to provide technology and platform support to the incubators. With a strategic plan of action, Telangana aims to be the first Blockchain Capital of India.
The largest global cryptocurrency exchange, Binance along with WazirX, India’s trusted Bitcoin exchange has initiated the Blockchain for India Fund. The fund is pumped up with $50 million to accelerate blockchain startups in India. WazirX was acquired by Binance in 2019. Moreover, the selected projects for “Blockchain for India Fund” will gain access to the Binance global blockchain ecosystem. They will also be mentored by some of the most experienced leaders in the space.
In a Cryptodose’s exclusive conversation with Nischal Shetty, CEO of WazirX said,
“It’s amazing to hear our PM speaking about the potential of Blockchain, and how India should consider its usage. Our PM has encouraged innovation, and I’m sure his positive words would encourage more people to join the revolution. India has a vast talent pool, and I look forward to positive regulations in India as this will give people more reasons to build in crypto space.”Nischal Shetty, CEO WazirX
Recently on 17th July, an open panel discussion was initiated to discuss the dynamics of adoption of cryptocurrency in India. The discussion comprised of eminent personalities from the law, tech and policy front along with Mr.Subhash Garg, head of Inter-Ministerial Committee on Virtual Currencies. The latter was instrumental in heading the crypto draft ban bill in India. The Indian crypto ecosystem actively participated in the same. The panel discussion provided great clarity towards the future of crypto in India. In conclusion, Mr Garg assented crypto as an asset or utility rather currency. He further added that the government must regulate it accordingly.
Another step towards the progress of crypto and blockchain industry in India is the Google Digitalization fund. Google’s CEO, Sundar Pichai announced about Google’s $10 billion investment fund to fuel India’s digital ecosystem. This fund can also be instrumental in the digital financial ecosystem.
With countries across the world adopting virtual currencies its time for India to level up its game. It’s time to explore opportunities for the growth of Indian digital financial ecosystem. This will thus be helpful in strengthening the Indian economy and attracting foreign investments through this space.