The enthusiasm expressed by India’s government as it encourages the continued experimentation with blockchain technology is a sharp contrast from its sentiment on cryptocurrency usage.
A major reason why is because India’s services sector is the key driver of the country’s economic growth — it attracts the highest direct foreign investment, contributes to 55.65 percent of the country’s Gross Value Added and employs 28.6 percent of its total population.
One also has to mention blockchain adoption across India’s service sectors such as banking, financial services, retail, supply chain and insurance industries – these can potentially add an extra $5 billion to the Indian economy.
Eleven01 which has helped aspiring blockchain startups and projects and whose partnership with Tech Mahindra, has developed India’s first ever homegrown blockchain protocol, is bringing its ecosystem to life in efforts to further India’s blockchain adoption.
The team behind Eleven01 believes in its ability to bring India to the forefront of the blockchain revolution. Through their ecosystem, India’s blockchain adoption has the ability to skyrocket while simultaneously allowing other innovators to tap into the world’s sixth largest economy.
I spoke to Rama Iyer, President & Chief Product Officer of Eleven01 on this anomalous situation
Why do you believe the Indian government favors blockchain over crypto?
“Blockchain is a technology like AI, ML, Data Analytics etc. It has certain characteristics, features, and value that it brings to end customers like any other new technology. From that angle, it’s not something for government to favor, but more to adapt to its different department and use-case, based on merit. This is something the Indian govt. is already doing. They are looking at – Land Registry, Judicial Records, e-Stamping, Transportation, DBT ( Direct Benefit Transfer) and many more. So, there is no way around it as far as blockchain technology and its adoption is concerned”.
Iyer explained that crypto, on the other hand, is still in its early days and more-so outside of the ambit of any regulation or overseeing body. He explained that It is definitely interesting from a startup angle on being able to raise quicker capital by way of tokens as opposed to old-style equity, but many scam projects have unfortunately given crypto a very bad name. The Indian Govt. like any other large economy govt. is taking a very practical and pragmatic view on crypto and trying to figure ways to create regulation around it, before it can allow acceptance of business using crypto.
“I’m positive and think it’s a matter of time, Indian govt and other govt’s will see the value of this instrument and join the bandwagon”.
What do you think deters the Indian Government from legalizing cryptocurrencies?
“We need to understand that India is a very large economy and the second largest country by population in the world. It’s hard for a govt. of a country of this size to take a knee-jerk reaction. It will always weigh various aspects before it allows any new policy, framework and financial instrument & rightly so. In this case, cryptocurrency has the added color of store-of-value, trading, and various ways where people are using it to launder money and for other illegal activities. This is definitely a challenge for any government of any country”.
Iyer commented that the Indian Govt. obviously does not want money launderers or other such illegal actors to use cryptocurrency for their nefarious activities. The Indian Govt. is currently studying various other mature governments and how they are dealing with cryptocurrencies, which in my opinion is a very positive sign. So in my view, there is no said deterrent per-se, but a cautious approach to ensure there is enough regulation before cryptocurrency can be allowed as a legal instrument.
How is blockchain already thriving in India and where do you see it flourishing even more in India?
“It’s still early days for blockchain in India, but we are seeing a lot of interest and PoC work that’s already in motion both in Govt departments as well as private sector, which bodes well for the sector. Blockchain is also seen as a green pasture for engineers and students to build their career on, which will mean there are more resources that will come online to be able to build a lot of applications and solutions on blockchain platforms like Eleven01. Given these developments, India seems well positioned as a market for blockchain to flourish”.
Do you believe India can become the global center for blockchain innovation, and why?
“I firmly believe India can and will become a global center for blockchain innovation. In fact at the International Business Congress, which was the largest blockchain event in Asia, the Govt of Telangana announced its intention to build a ‘Blockchain District’ which will be one of the largest ecosystems for blockchain in the world. The State announced this in partnership with Tech Mahindra, $5B revenue Indian engineering and services company and Eleven01 which is the first and largest blockchain protocol coming out of India”.
Iyer added that India produces a large number of engineers every year and the Govt is encouraging and investing in incubators across the country. These two factors resonate well and are a good mixture to enable students to learn new emerging technologies like blockchain.
What problems has blockchain solved in India, and what additional problems do you think it could solve and how? (ie; corruption, security)
“As I mentioned above, India is looking at a whole bunch of use-cases to be adopted across government departments in various ways and means. Many of the cases are to create transparency and trust, whether it is related to government tenders, create a level playing field or remove corruption from various opaque systems and bring it under the ambit of blockchain. There is also a lot of interest and keenness to learn about blockchain adoption in other governments worldwide and explore areas to go after first. There is also a multitude of Proof-Of-Concept projects that are happening across the government apparatus and some of it I’m sure will get into mainstream production systems pretty soon”, Iyer concluded.