Recently, the Indian Government released details of the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. The document is meant to be presented and discussed in the Winter session of the Parliament. The details of the proposal include a partial ban on cryptocurrencies in India. The details, however, are unclear as to what is going to happen, that and the fact that it is still up for Parliamentary discussion which means it is still subject to changes.
But what is the intent of the Bill and that of the Government is quite clear with the given details. It has been made clear on multiple occasions that the Indian Government has nothing against blockchain technology per se. However, cryptocurrencies, the simplest use case of blockchain technology raise a lot of concerns for the authorities. Officials have been citing concerns on the black economy, terrorism funding, and many other illegal activities or unregulated markets. The anonymity provided by the technology is the key factor for these concerns.
India is a country that has been facing these problems for a long time and technological applications have helped mitigate them to a large extent. However, the decentralized nature of the blockchain economies can jeopardize years of progress on these fronts. “This is true for every country and region in our world. The underlying technology has great potential for a lot more applications than what we see today. However, the concerns accounted for by the authorities are legitimate and also applicable to the current (centralized) systems. It is the control on centralized systems that makes them easier to work with, from the perspective of authorities.” said Dev Sharma, CEO of Blockwiz, a global crypto marketing agency.
National and international authorities do not seek opportunities and cases like the common folks see. The reason behind having centralized systems and governance comes out of our long history of decentralized activities. “With information technology, the Internet, and digital tech at our disposal, decentralization can finally find footing in human activities but we are still a long way from dropping centralized systems totally. Smaller countries like El Salvador will find it easier to adapt to cryptocurrencies since it provides them a place in the global economy and has more advantages. On the other hand, countries like India and China are looking into regulatory policies to protect their populace which makes sense given the complexities.” added Dev Sharma of the Canadian agency.
One of the highlights of the document was the classification of cryptocurrencies as private. The definition is still unclear but the intent is to understand the ecosystem in simpler terms and regulate accordingly. This classification can be a big step for the crypto space as it may influence similar differentiation and segregation from other governments. For the general public, it can also act as a reliable source of information to analyze various tokens in the market. We already have over 10,000 different cryptocurrencies (as of November 2021), which is overwhelming in itself. The markets have differentiated them for the better part and only a handful of them have relevance but uncertainty over others can’t be denied either.
Right now, we are facing a situation where two very distinct systems are working against each other. The aim of the authorities and public movements should be to find the right balance and applications for either system. This will bring much-needed stability and security for everyone around the world. Indian authorities are taking the first step towards it, hopefully in the right direction. If not, it might lead to losses for the public and companies already invested deep in crypto, which is another factor that is being considered with the bill.
In the last decade, India has found its place in the international socio-political landscape. These actions can incite (and hopefully inspire) other authorities to make better policies that profit the public and help protect their interests. Spreading awareness and education about the technology is another key factor to achieving this. All-in-all, we await the final verdict on the regulations and hope it paves the path to a better future for everyone.
“The vast possibilities of our great future will become realities only if we make ourselves responsible for that future.” – Gifford Pinchot