When discussing the adoption of cryptocurrency by the masses, it is easy to forget it is not a homogenous reception, and each country will be different. The SEC is starting to offer proper guidelines around the regulation of cryptocurrency right now, which is a great signal for that geographic area. On the other hand, recent draft legislation in India proposes a full out ban on cryptocurrencies.
The draft bill, “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019”, would affect the selling, buying, and issuing of cryptocurrencies in India. There are additional measures in place that would ban digital currency under India’s anti-money laundering act.
Both of these pushes seem to stem from the idea that cryptocurrencies are a method of defrauding investors or perpetrating money laundering. What this stance ignores is the fact that every other type of currency and investment has at some point been used to commit both those crimes. And it is easier to launder money using cash than trackable cryptocurrency.
This is not to say there isn’t push back from other factions within the country. It was reported that other governmental committees believe it should be legalized or at least not be banned on the whole. A lot of this legislation seems to be arising from a place of not knowing how to adapt current fiat and legal practices to the changes in the economic landscape that result from using cryptocurrency.
U.S. Regulatory Changes
Regulations are certainly necessary for protecting consumers, but India’s current stance will likely just create a blackmarket. The former chairman of the Commodity Futures Trading Commission (CFTC), Gary Gensler, has said that regulation is necessary to grow the blockchain industry, because of the protection it provides investors. This protection allows for both regulators and consumers to trust blockchain companies more, which will lead to greater adoption.
The big worry right now is with custody and market manipulation. As recent news stories have shown about managing cryptocurrency custody using personal wallets, there are holes in the security that must be fixed. Especially when there is fiduciary duty involved. Gensler went on to say that the goal for an ETF would be:
“To ensure that if there is an exchange-traded fund, that the markets themselves for those exchange-traded funds and the underlying Bitcoin or Ethereum it’s referencing is not really susceptible to manipulation.”
Technological Advances in India
At the same time as cryptocurrencies are getting pushback in India, blockchain companies within the country are moving forward with great ideas. Tech Mahindra is in the middle of rolling out an anti-spam call solution that uses blockchain technology. The goal is to protect mobile phone subscribers and help phone companies comply with regulations from the Telecom Regulatory Authority of India.
India is a massive market, so companies like Tech Mahindra have a giant potential user base. With 800 million phone subscribers being affected, this technology could save each user a significant amount of time by help them aggregate the determination of who they have consented to receive communications from.
Government to Citizen services have generally suffered in the past because of the potential for corruption or poor management. Blockchain is helping to fix this rift by facilitating cleaner and more trustworthy business transactions between the two parties.
The service has reached proof of concept with help from Microsoft, and now Tech Mahindra is working with Samsung to pair the technology with their platform. This would be a mutually beneficial relationship for Samsung and Tech Mahindra in terms of each being able to expand their opportunities and operations.