India’s National Institute for Smart Governance (NISG), recently released a draft of the country’s strategy on blockchain and distributed ledger technology (DLT). The draft was released on 30 December 2019 stating the need for a central bank digital currency (CBDC), the digitization of the National Rupee and a blockchain currency for the nation. The draft was released to the public by The Economic Times of India on 28 January 2020.
The draft states the proposal of a Central Bank Digital Rupee (CBDR), a digital currency issued on the country’s blockchain network. NISG strongly recommends the government to release a CBDR as a secondary alternative to public blockchains making use of Ethereum.
Light Touch Regularity
The NISG referred to the challenges faced by the crypto industry in India due to the lack of regulatory reforms. The committee has stressed on the need of issuing official statements instead of public speeches to increase regularity. Public statements though helpful in crypto regulation aren’t officially recorded statements. An official statement would help in the strict enforcement of crypto regulations in the country.
Another important step towards blockchain development in the country according to NISG would be the adoption of a light-touch regulatory approach. Laws concerning cryptocurrency and blockchain in India face quite the heat due to them being too constricted and technologically narrow.
Cryptocurrency Not Banned: Reserve Bank of India
Meanwhile, the central bank of India states that it hasn’t banned digital currencies in India but instead called out for strict regulations enforcing digital transactions. The statement was issued in an article published in The Economic Times, revealing the ring-fencing of networks from activities involving financial, operational and legal risks. The risks include but are not limited to activities like money laundering and financing of terrorist activities.