Recently, Prime Minister Modi in his address at the India Ideas Summit by the US-India Business Council highlighted blockchain to be an ‘opportunity in frontier technology’ and the country being a haven for investors around the globe.

As this news provides a sense of revived hope in terms of how blockchain and cryptocurrencies would look in the Indian landscape, let us go down the path to see how our responses in the past have been, for adapting towards such technologies as part of our the economic structure in the country, alongside our action towards the usage of cryptocurrencies in the country.

In a letter published in November 2019, Sanjay Dhotre, India’s Minister of State for Electronics and Information Technology (MeitY), stated that the Indian government is developing a National Level Blockchain Framework and is currently preparing an approach paper.

In January, 2020, NITI Aayog had come up with a report that looked at how India can adapt blockchain technology in order to uplift various sectors around the country. The basic takeaways from this report included NITI Ayog explaining the idea of blockchain, showing how it would benefit the government, what is the current scenario of  blockchain development in terms of skill and manpower, and what suggestions could be made in respect to how sectors like healthcare, education, property etc to benefit from this framework. They also conducted Proof of Concept (POC) pilot programs that tackled practical implementations of their suggestions in four areas in an attempt to assess the power of distributed ledgers in providing enhanced efficiency and improved possible hurdles in execution, like track and trace’ of drugs in the pharma drug supply chain, claim verification and approval in the disbursement of fertiliser subsidies, verification of university certificates, and transfer of land record ownership. A second part of this report, which is to include different recommendations for using blockchain technology in India, has yet to be released by NITI Ayog.


On the other hand, the usage of cryptocurrencies in India has always been the subject of speculation. In 2018, the Reserve Bank of India (‘RBI’) had blocked any financial dealings with crytocurrencies vide a circular. However, in March 2020, the Supreme Court had lifted the ban placed by the RBI, allowing banks to deal with cryptocurrencies and related services. Despite the uncertainty of regulations that revolve around the usage of cryptocurrencies in the country, there has been a massive rise in its trade, in terms of individuals and entities participating. However, the current Finance Ministry’s stance looks leaning towards an eventual banning of digital assets. In a recent webinar on 17th July, former Finance Secretary of India, Subhash Chandra Garg, discussed the potential of centralization of a digital currency, and that crypto assets can be used as regulated commodities but must not be allowed to function as currencies in India. He said that the ‘ban would only forbid cryptocurrencies insofar as they functioned as currencies. They would still be available for trade and investment, such as commodities, but must be regulated in a similar fashion’.

Now, as we look the PM Modi’s address towards the promotion of blockchain technology in the country, the introduction of a digital currency looks like a possible route to explore, and it shall be interesting to see how our policy experts would comment and act upon the same, over the due course of time. However, since there is a bill pending before the parliament that calls for a ban for cryptocurrencies, only time will tell us how our newfound regulations will help us make most out of these two technologies in consonance.

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