SC Lifting Ban on Cryptocurrencies to Boost Indian Businesses, Jobs: IIITM-K

THIRUVANANTHAPURAM:
The order of the Supreme Court of India lifting the ban on trade in cryptocurrency will open up huge opportunities for a spectrum of enterprises in India including startups and organisations in the blockchain space as the country can emerge a preferred destination in cryptocurrency-enabled businesses.

The SC decision on Wednesday striking down curbs in trading in cryptocurrency, imposed by Reserve Bank of India (RBI) in 2018, will prove to be a boon to the Indian economy, attracting many organizations/start-ups in the blockchain space to work on crypto-related projects and token markets. Capitalising on this opportunity, India can become a preferred destination for crypto-currency enabled investors, entrepreneurs and new business initiatives.

Even with the volatility, the crypto market is worth 237 Billion USD as of 2019 and with wider adoption, the experts predict huge growth in the market share in the years to come.

The order will pave the way for re-opening the crypto-exchanges, shut down in April 2018 due to crypto regulations, to restart their operations. Before the crypto ban in 2018, India accounted for just 3% of the global cryptocurrency market. Now, with the decision, there will be a surge in the users and India will become more prominent in the crypto-enabled business world.

Also, the huge trained human resource requirements for enabling such businesses will offer big opportunities for the country’s aspiring youth.

The futuristic initiatives like Kerala Blockchain Academy by Indian Institute of Information Technology and Management – Kerala (IIITM-K), which runs the Accelerated Blockchain Capacity Development (ABCD) program in collaboration with Kerala Development and Innovation Strategic Council (K-DISC), will have a major role to play in this massive capacity building exercise.

The RBI imposed a ban on cryptocurrencies in 2018, to the dismay of business enthusiasts, and barred traders from facilitating any dealing with crypto. The bank issued circulars cautioning users, holders and traders against dealing in cryptocurrencies or providing services in relation to cryptocurrencies.

The ban was on the basis of crypto not being stamped by the government and for not being in any physical form. This decision had triggered panic among many groups from start-ups to larger enterprises as they looked forward to offering services in cryptocurrency. Eventually, all of them were forced to close shop.

Crypto-currencies can fuel innovations through tokenization that can represent digital assets over the blockchain. Even though ICO’s (Initial Coin Offering) is the preferred tokenization method, it involves high risk as they are positioned mainly as utility tokens enabling transactions. The value they are pegged at is typically decided by the transactional volumes, which in turn, depend on the network of people/entities that transact with that coin.

In the Indian context, STO’s (Security Token Offering) will be a more suitable option, as they are backed by assets and comply with the regulatory protocols. The government can also utilize the potential of STO’s over blockchain for funding public projects by enabling appropriate mechanisms for the mobilization of crowd funds. Such security tokens may be defined around public physical/virtual assets owned or operated by government or public organizations.