If someday a movie is made on India’s Blockchain ecosystem, it will make for an interesting watch considering all the ingredients. It will have a thrill, happiness, melodrama, anti-climactic twist, gloom and suspense that could potentially give Alfred Hitchcock a run for the money.
To put it into perspective, India’s blockchain story has seen expansion, that was big enough to scare the daylights of the Indian banking system and its authoritative monopoly. This prompted the central bank to order a diktat suggesting all its regulated entities like Banks and NBFCs to not engage with businesses dealing with cryptocurrencies. The aftermath of this “ban” (sort of) resulted in start-ups getting shut and Indian crypto-community facing harassment in terms of loss of capital, resource and innovation.
But, just like every feel-good movie, this also had to have a happy ending. On 4th March 2020, the Supreme court of India overruled the RBI ban on crypto-trading and slammed them for imposing a ban without any substantial evidence of crypto exchanges adversely impacting RBI regulated entities. Finally, after a struggle of 2 years, our conventional protagonists (we are looking at you IAMAI) won the hard-fought battle and opened the door to innovation in the crypto sector.
…….. And then they lived happily ever after!
I wish it was as simple as this. But, this is no wonderland and we are no Alice. There is much more to the story than what meets the eye. Behind the drum rolls and the celebration of SC judgement lies an arduous task to educate masses, media and government for better regulation to stop scams.
Here, I list out point-wise what could be the future for Blockchain in India after the SC verdict. Please bear in mind that it is all based on ‘whats’ and ‘ifs’ using a logical deduction. It might or might not happen, but it is always better to address the issues before it turns into a Frankenstein monster. Without further ado, here it goes:-
The positive side of the coin:
Crypto exchanges have gone berserk in India and rightfully so. It’s a win for the likes of WazirX and the long term crypto lovers are back in the business now. The victory tastes even better considering it has come after a long-fought battle.
With this judgement, DeFi startups that were unable to leverage the Indian market will now start targeting India with this newfound momentum. Now, Indians can finally get access to the new innovations in the DeFi sector that have been disrupting the banking ecosystem in the west.
Due to the RBI ban, investors did get cold feet about investing in the crypto sector and were wary of engaging with them. Now with ban gone, more capital will flow in and that can kickstart the crypto revolution that has been overdue in the country.
The devils of cynicism speaks………
RBI still has a huge amount of power and regulatory control. So it may try to throttle the crypto industry, if not by imposing banking restrictions, but by adding holding limits just like in the case of gold.
The case has been won against the RBI circular banning the crypto trading with banks and fiat currencies. However, the draft bill on banning cryptocurrencies put forth by Finance Ministry in 2019 can still get tabled in Parliament and that will create another hurdle in crypto’s acceptance in the country. However, with SC squashing the ban, one can be hopeful that it will prompt the policymakers to rethink and rejig their policies and their outlook towards cryptocurrencies.
There is still a lot of work pending on our end as crypto lovers to prove the true nature of cryptocurrencies as peer to peer transactions. One has to begin with:
Educating masses on how to identify scams
Educate the media on how to cover crypto news and how to identify news-worthiness of any happening in the crypto world.
Educate technology enthusiasts to explore this sphere and carefully and usher a new era of innovation
Educate governing bodies on the regulations needed and assisting them in the process.
In all the above scenarios, the logical conclusion is that despite the short term respite, the Indian crypto community have a lot of work on their table. This decision will definitely bring policymakers to the drawing table and rethink their policies regarding cryptocurrencies. It will hopefully change the mindset towards the crypto community in India and prove to be a major leap in its acceptance in the country and world, subsequently.
So, while the Indian crypto community is in party mode right now, what follows is an arduous task to catch up on the lost time and bring India at par with the level of crypto-revolution that is happening in other parts of the world.
Stay tuned as I share my views on what could be our next set of actions in my subsequent blog posts.
We have also published a detailed analysis piece of major highlights of the Supreme Court judgement against the RBI ban. Make sure to read that as well.
Ish Goel established the ‘Blockchain Centre of Excellence’ at Somish in 2016. Through the Somish Group, he has worked with the Government, Real Estate, BFSI, Manufacturing, Retail, Agriculture and Logistics industry over the past one decade.
Ish is one of the key blockchain architects at Somish and has led delivery of multiple blockchain products using platforms like Ethereum and Hyperledger globally. Key product offerings include: DEF (Data Exchange Framework powered by blockchain, getdef.io), GovBlocks (Decision Making Protocol, govblocks.io) and Certy (Issue Certificates on Blockchain, certy.io)