During a webinar on July 17th, the former Indian finance secretary Subhash Chandra Garg discussed cryptocurrency with Indian industry leadersThese include Nischal Shetty, the CEO of the Indian cryptocurrency exchange WazirX, and Siddharth Sogani, the founder of the blockchain research company Crebaco.
In 2019 Garg and his secretary drafted a law that proposed banning cryptocurrencies, a 10-year prison sentence and a fine of up to 25 million rupees (~ $ 3.3 million) to anyone who has spent, used or held these assets.
Opening of a dialogue with the industry
Today was the first time that Garg discussed the issue with members of the cryptocurrency industry, allowing the former secretary to clarify the longstanding view that the proposed bill should completely eradicate crypto assets from the Indian financial ecosystem.
Garg said he approved the use of crypto assets as regulated goods.But he added that they cannot act as currencies in India.
According to Garg, there is no problem with someone presenting a “computer code” as a digital asset and with people who want to invest in it. But this way he said: Cryptocurrencies tend to be a tradable commodity rather than a currency and should be regulated from the same point of view.
He also insisted that private crypto assets as currencies have no justification for existence and should be banned.
It’s time to digitize coins, but not cryptocurrencies
When Garg shared his thoughts on digitizing money, he said that the way we perceive and use money has changed significantly over time. Today, Digitizing money and creating a central bank digital currency is part of the general need to provide better financial services, he said.
He claimed there were several ways the Indian government could digitize the rupee and crypto assets based on distributed ledger technology were just one of those. However, he strongly refused to digitize money with cryptoactive assets and preferred the use of dematerialized banknotes, saying:
“The way cryptocurrencies work is about distributed ledger technology. It’s a high-investment technology. It can never be an ordinary person’s currency.”
Advocates of cryptocurrency respond
While Garg found no logical reason for the existence and use of crypto assets, he showed great attraction for distributed ledger technology.and claims that there are many promising use cases in the financial landscape.
To this end, Nischal Shetty of WazirX said that crypto assets are important to drive blockchain innovation. Using the example of implementing a code in the Ethereum blockchain, he explained to Garg that a developer has to make a payment in ether (ETH), a cryptocurrency.
These payments cannot be made in the Indian rupee, he said. Cryptocurrencies should therefore not be seen as a replacement for the rupee, but as an alternative payment method in places where traditional money cannot be used.
He also mentioned the importance of cryptocurrencies for micro payments, loans and other financial sectors.
Siddharth Sogani from Crebaco considered the novelty of the technology Blockchain and cryptocurrencies are a new technology and all knowledge “is based on practical experience, not on a number of books”.
Sogani concluded that the government should not ban cryptocurrencies out of fear, but instead should strive to understand the technology and promote its growth.