Draft Of India’s National Strategy On Blockchain And DLT Implies State-Run Digital Rupee
A draft of India’s national strategy on blockchain and distributed ledger technology implies a central bank digital currency (CBDC), the digital Indian rupee, and a national blockchain.
The National Institute for Smart Governance (NISG), a non-profit public body incorporated by the government of India, has issued a draft document on the country’s public blockchain strategy. Released on Dec. 30, the report seems to have been published lately as major local publications like The Economic Times of India announced on the draft strategy on Jan. 28.
In the document, the NISG has advised the Central Bank Digital Rupee (CBDR), a digital currency issued on a national permissioned blockchain. NISG “strongly suggested” that the CBDR be published by India’s government and the country’s central bank, the Reserve Bank of India. The document reads:
“As an alternative to Public Blockchains that operate with native cryptocurrency, like Ethereum, it is strongly recommended that Government of India along with RBI come out with a Central Bank Digital INR (CBDR) administered over a Public Permissioned Blockchain that processes transactions through a Turing Complete Virtual Machine allowing decentralized applications to run on its platform.”
The NISG also described the current legal challenges for the industry in India correlated with a lack of regulatory clarity. As such, the body asked Indian authorities to improve and promote regulatory clarity in the industry by issuing official statements rather than making public statements:
“Public statements, whether through the press or formal speeches, are helpful but are not official statements of the 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 how existing law applies.”
Additionally, the company suggested selecting a “light-touch regulatory approach” at the beginning stages of the blockchain industry’s development in India. According to the NISG, current regulation in India is “too restrictive” and does not take into record the potential of developing technologies.
The news arrives a few days after the RBI stated that virtual currencies are not forbidden in the country, embellishing that instead, regulated entities are forbidden from giving crypto assets in the country. As stated, the central bank of India banned Indian banks from granting crypto-related services in the country in 2018.
The RBI made its announcement between continuous court hearings upon the central bank at the Indian Supreme Court, as a consortium of cryptocurrency firms and specialists endeavors to have the ban revoked.