The government is soon expected to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the Parliament to ban all ‘private’ cryptocurrencies amid concerns over their use for terror financing, money laundering, and other illegal activities.
Contrary to the government’s alleged plan to block all cryptocurrencies in India, one of India’s top technocrats and Aadhaar architect Nandan Nilekani believes people should be allowed to engage with them. Nilekani, who had earlier backed startups such as Tracxn, RailYatri, ShopX, Power2SME, Ninjacart, Fortigo, etc., and set-up a venture capital fund called Fundamentum in 2017 along with Helion Ventures co-founder Sanjeev Aggarwal, said that cryptocurrencies should be considered as an asset class and people should be allowed to have some of it. Nilekani’s comments come amid the government reportedly planning to propose a law to ban cryptos. The government is soon expected to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the Parliament to ban all ‘private’ cryptocurrencies amid concerns over their use for terror financing, money laundering, and other illegal activities.
“We should think of crypto as an asset class and allow people to have some crypto. Crypto as a transaction medium will not work as fast as UPI, which is targeting a billion transactions a day. However, crypto has enormous capital,” Nandan Nilekani said in a Clubhouse session on Monday with Silicon Valley angel investor Balaji Srinivasan and Blume Ventures’ Managing Partner Karthik Reddy.
Startups in the crypto space, who have been staring at a bleak future in India, have welcomed the comments from Nilekani. “Crypto has a very strong undercurrent and with global tech stalwarts already considering it as a currency of the internet throws light on its relevance. Positive comments by Nandan Nilekani just confirm that the same is the case in India as well. He has rightly mentioned that cryptocurrency won’t compare when benchmarked with UPI as a transaction medium but the benefits of crypto are much more than that. Allowing Indians to hold and grow crypto helps us participate and even drive the financial systems of the future,” Edul Patel, CEO and Co-founder at automated crypto trading platform Mudrex told Financial Express Online.
Nilekani added that while Indian regulators are considering a Central Bank Digital Currency or CBDC, he is not sure if “we need a private stable coin or if a digital rupee will be good enough.” He added that India needs to look at how it will help Indians, how MSMEs can access capital using bitcoins. “No amount of tech is going to sway anyone’s view.”
In February 2021, India’s billionaire investor Rakesh Jhunjhunwala, often referred to as the country’s own Warren Buffett has called Bitcoin “the speculation of the highest order”. Jhunjhunwala had rubbished the cryptocurrency saying that “I won’t buy it for even $5. In the world, only the sovereign has the right to create currency…I think it is the speculation of the highest order. I don’t want to join every party in town. The hangover will be much worse. I won’t even put my mind on Bitcoin,” Jhunjhunwala had told CNBC in an interview.
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