India’s National Institute for Smart Governance (NISG) has issued a draft mentioning the importance of Blockchain tech and distributed ledger technology while proposing the issuance of one of the rising concepts in the cryptocurrency space i.e., Central Bank Digital Currency (CBDC). The draft was issued on Dec 30, 2019.
NISG is a not-for-profit public body created in 2002, in a public-private partnership (PPP) by the promoters like the government of India, NASSCOM, and including others are from the list which is referred on the website.
The draft is published under the title “National Strategy on Blockchain” wherein the importance of blockchain technology and its value proposition has indicated very neatly and noted two key elements. These are verified the origin of data and trusted processes.
In the document, there is a mention of India’s state-run-digital Rupee and a national blockchain for the country which can be deployed as India’s national strategy for technological advancement.
Prominence and Use of Blockchain Tech in India’s Ecosystem
NISG while outlining the national blockchain strategy for India talked about the importance of blockchain tech and its “applications of smart contracts.” It is suggested that the application of smart contracts in various industries and sectors are highly useful in terms of eliminating the role of intermediaries or a third party while ensuring trust, efficiency, and cost-effectiveness in the system.
With the vision of making India as one of the leading countries in the fields of innovation, education, technology, and adoption of blockchain tech by 2025, the mission of National Strategy on Blockchain is to prepare the required policy frameworks to facilitate the integration of blockchain tech within the existing economic structure.
Further, the list is given where smart contracts can be applied. These are insurance, internet of things, mortgage loans, employment contracts, securing copyrighted content.
Blockchain applications can be also useful in financial applications, digital identity management, supply chain applications, manufacturing, educational certificates & student /employee credentials, healthcare, telecommunications, to solve government issues, shared data services, decentralized marketplaces, etc.
Is India About to Issue CBDR?
NISG through the documented draft expressed the implementation of Central Bank Digital Rupee (CBDR), as a native cryptocurrency, which can be supplied via India’s government along with RBI (Reserve Bank of India- central bank) with a complete oversight on a “national permissioned blockchain as an alternative to public blockchains, like Ethereum.”
The digital rupee or digital fiat currency is proposed to be regulated by the government of India with legal tender and not like the other virtual currencies and cryptocurrencies.
The document cited the advantage of Central Bank Digital Rupee (CBDR) and said that “the Indian Blockchain developers and entrepreneurs can create and run decentralized applications like in the case of the open-source Permissionless Blockchains like Ethereum, EOS, etc.”
NISG on its website is also inviting comments on the draft of “National Strategy on Blockchain.”
Cryptocurrency Not Banned In India
Reportedly, in September RBI has filed a 30-page affidavit in the Supreme court of India which demonstrates that cryptocurrencies aren’t banned in India. However, the regulated entities like banks are restricted to provide or deal in the services, related to cryptocurrencies, due to the associated risks of terror financing and money laundering.