'Any entrepreneur who wants to create companies on blockchain will have to move outside India.'
'A ban will also wipe out the entire asset investing class that has built up in India.'
As the Narendra Damodardas Modi government gets ready to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the winter session of Parliament, there is panic among thousands of private players in the field.
It is said the Bill will prohibit all private cryptocurrencies in India, including the most coveted Bitcoin.
How will the Bill affect the industry? "India lost out on Internet 1.0 that saw the rise of companies like Google, Amazon, Microsoft. This trend will continue if we ban crypto here, and we will once again miss the opportunity of enabling innovators to innovate such infrastructure companies in India for the world," Ashish Singhal, founder and CEO of CoinSwitch Kuber and co-chair of the Blockchain and Crypto Assets Council, tells Rediff.com's Shobha Warrier.
How will the Modi government's decision to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 affect the cryptocurrency industry, more so crypto investors, as the Bill wants to prohibit all private cryptocurrencies in India?
Are you worried about the consequences?
The industry has been actively communicating with all the stakeholders keeping investor protection at the forefront.
Our discussions over the last few weeks indicate, there is a broad agreement in ensuring that customers are protected, and financial system stability is reinforced so that India is able to take advantage of the crypto technology revolution.
The crypto industry is hopeful that the government will involve the industry stakeholders while drafting the bill.
At CoinSwitch Kuber, we shall follow the directions provided by the government.
I urge all the crypto asset investors in the country to remain calm, do their own research before arriving at any rushed conclusion. Investors should wait for a government statement on this matter, and not rely on secondary sources of information.
With the government's announcement to introduce the bill, there was panic in the market and cryptocurrency prices including that of Bitcoin, Ethereum, etc fell sharply. Is this going to be like a bubble bursting?
The news of the proposed crypto bill caused a lot of misinformation, leading to the investors panic selling at the beginning.
All the investors must wait for an official communication in this regard.
As an industry, we have been actively communicating with all the stakeholders keeping investor protection at the forefront.
It is said the government will allow 'certain exceptions to promote the underlying technology of cryptocurrency and its uses.'
What does this mean?
As of now, we do not have any official communication from the government in this regard.
It is reported that India has the highest number of crypto owners in the world, around 100 million.
Would you agree that the currency definitely needs monitoring as it exists beyond the state and central bank control and there are about 14,500 cryptocurrencies?
And like the RBI said, this could pose a serious threat to the country's economy.
Do you think a ban on private cryptocurrency suddenly can ultimately impact the economy itself?
Crypto should be classified as an asset class investment in India. It is similarly regulated in many other countries, and almost all use cases of crypto as investment and not payment.
Today, India has close to 15 million crypto investors. It is the second-largest in global crypto adoption as per Chainanalysis and over $500 million in investments from marquee investors, including Andreessen Horowitz, Sequoia Capital, Tiger Global, among others.
A progressive regulatory framework will create a prosperous crypto ecosystem and expand financial inclusion in the country in a secure, simple, and transparent manner.
A ban would stop all innovations in cryptocurrencies in India.
Any entrepreneur who wants to create companies on blockchain will have to move outside India.
A ban will also wipe out the entire asset investing class that has built up in India.
India has lost out on Internet 1.0 that saw the inception and rise of companies like Google, Amazon, Microsoft.
Today, anyone setting up an online business in India needs to pay these infrastructure service companies to start their business.
This trend will continue if we ban crypto here, and we will once again miss the opportunity of enabling innovators to innovate such infrastructure companies in India for the world.
Who are the major investors in cryptocurrency? Young people? If so, why?
A typical crypto investor is less than 28 years old and residing in non-metro cities. More often than not, the investor has never invested in an asset before.
Demonetisation has inducted millions of digital natives into the digital financial services industry in India. Interestingly, these new digital-savvy Indians are also showing huge interest in understanding crypto-assets and their potential to shape the future of digital India
What kind of future do you see for cryptocurrency in India and also worldwide?
Crypto has become much bigger than the asset class itself. Web 3 is the new internet. We believe, tomorrow's Amazon, Google, Facebook would be built on blockchain and hopefully would come from India.
India has the chance, which it also had earlier when the Internet originated, to build these technologies in-house for the world.
We believe the government is also seeing this now, and understanding the potential of crypto and blockchain in the growing needs of the Digital India that we want to build.
Feature Presentation: Aslam Hunani/Rediff.com