India National Draft Blockchain Strategy Recommends Better Regulatory Approach to Digital Rupee

• NISG makes recommendations pertaining to the RBI to develop Central Bank Digital Rupee (CBDR)

A week after the Reserve Bank of India (RBI) tried to clarify its stance on cryptocurrencies in India, major news outlets such as the Economic Times reported about the draft paper of the national strategy on blockchain in the country. The document was published by the National Institute for Smart Governance (NISG), a non-profit company incorporated by the Government of India and NASSCOM that facilitates e-governance solutions to dispense better services to the citizens.

The paper expounded the potential of blockchain in different organizations. It mentioned the application of the technology to devise new business models and new revenue streams. Apart from this, blockchain can be used to implement process automation by removing the middlemen and improving efficiency, among other applications.

Referring to the history of the lapse of regulatory clarity in the country, the NISG threw light on the need to improve the regulatory approach of the government by issuing official statements instead of ambiguous public statements. The NISG suggested a light-touch regulatory approach to do away with the “restrictive” regulation which has a direct impact on technology development. It said:

“Public statements, whether through the press or formal speeches, are helpful but are not official statements of application by the agency. If an agency intends to enforce its laws in new and innovative ways, it must first notify industry stakeholders of its intent to do so and the way in which existing law applies.”

The NISG also suggested the RBI develop the Central Bank Digital Rupee (CBDR) — which, apart from the benefits of CBDCs, would benefit Indian blockchain developers from the clutches of heavy regulations.

 

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