A leading industry association is holding a Global Summit on Bitcoin and Blockchain, entitled “The State of Cryptocurrency - Opportunities and Challenges for Indian Economy.” It will be held by ASSOCHAM at the Hotel Hyatt Regency, New Delhi on March 3.
ASSOCHAM has 400 chambers and trade associations under its fold in India and has more than 450,000 members spanning the entire country.
The reasoning behind holding the summit is that ASSOCHAM sees Bitcoin as a “revolution in the field of supply chain finance.” In a release on their website they also take note of the fact that India is the world’s largest remittance market and there are "enormous opportunities." The global summit will help bring together various stakeholders including government, regulators, exchanges and investors. It is notable that this summit comes at a time when in the first week of February the Reserve Bank of India (RBI), India’s central bank, issued a fresh warning to investors about dealing with Bitcoin and other cryptocurrencies.
Future of Bitcoin in India
After the demonetization of 86 percent of the Indian currency in circulation, announced on Nov. 8, 2016, there has been a rising interest in Bitcoin in India. This has raised a question about regulation and laws surrounding Bitcoin, considering it is still operating in a legal vacuum.
We talked with Santosh Parashar, joint director and Head-Corporate Affairs and Capital Market Division of ASSOCHAM, about the future of Bitcoin. He says:
“The future of Bitcoin/cryptocurrency in India is expected to gain momentum. We, at ASSOCHAM, prompted to hold the first global summit by any business chamber in India, given the aftermath of the demonetization drive in India when Bitcoin’s exchange rate rose above $1000 and also the corporate and banking sector in India had never before focused on the use of the Blockchain technology.”
Bitcoin getting a bad rap
The demonetization drive in India brought black money into focus and the demonetization was being pitched as a crusade against tax evasion and other such financial vices. During the course of the demonetization, the rising prices of Bitcoin in India led to many in the media covering the cryptocurrency in a negative light.
The focus was predominantly on tax evaders using Bitcoin to move their ill-gotten wealth out of the country. Efforts like the global summit being organized by ASSOCHAM can lead to a wider and more accurate understanding of what Bitcoin and cryptocurrencies are in India.
The participation of government and central bank regulators can be a big positive in this regard. Regarding the negative press, Santosh says:
“The recent negative press surrounding Bitcoin might have distressed the newly joined wallet users but this does not seem to have affected those who have enjoyed the high return in recent past.”
He adds: “Keeping in mind the dire need of clarity of thoughts on Bitcoin, Blockchain and the associated risks as well as for the advancement of know-how on innovations happening in Blockchain technology amongst the stakeholders, including government, regulators and investors in the country, the Department of Corporate Affairs, ASSOCHAM is organizing a Global Summit on Bitcoin & Blockchain, The State of Cryptocurrency - Opportunities and Challenges for Indian Economy, on March 3, 2017 in New Delhi, India.”
We were also informed that there are also plans for further summits in Mumbai and Bangalore.
No more fearing the unknown
ASSOCHAM and other such organizations have an important role to play as they have the ability to suggest policy papers to the government of India and regulators. Kumar Gaurav, chairman of Auxesis Group, who is also due to speak at the global summit, says:
“The biggest concern is fear of the unknown, and like many other developing countries, India also does not have a clearance on cryptocurrencies and is working on it. Lack of experts and researchers who can advise the government correctly is making the situation worse.”
This lack of knowledge can be a dangerous thing. Kumar adds: “As innovators and early adopters, it's our responsibility to do it and use these technologies in a way that they can do more good rather than cause damage to society. To start with, there are plenty of well-researched publications and reports on cryptocurrency by reputable organizations such as the ECB’s report on “virtual currency schemes” in 2012 and 2015. Also, we have to start separating the fact and myths as soon as possible to differentiate between scam coins and Bitcoin. A few days ago, the Bank of Uganda counted all of them in the same category which shows their negligence in understanding cryptocurrencies.”
One of the primary issues in India and the one that the Reserve Bank has been constantly talking about is the safety and security of investments in Bitcoin and other cryptocurrencies. Not only are the safety of investments an issue but there are other concerns as well.
The global summit will focus on security and data in the Blockchain and discuss topics like unauthorized spending, double spending, race attack, history modification, deanonymization of clients among other topics.
Another potential upside to this summit is possible clarity on regulations in India surrounding Bitcoin. Santosh reveals:
“The summit is also expected to bring out relevant suggestions and recommendations for draft policy and guidelines, which may facilitate even to the regulators to address the issues in the light of comments received, coming out of complex issues and a plethora of information on the subject.”
Is Bitcoin’s official status going to change in India?
Will Bitcoin gain some kind of official foothold in India?
Kumar Gaurav says pragmatically: “Bitcoin and VCS came into government attention very recently. The RBI and Indian Government are trying to understand it better and weigh its implication before it comes with any legislative clarity. Meanwhile, the RBI has not banned or taken any harsh action against Bitcoin but has only issued a warning which is related to consumer protection. I can share some more insights on it after my planned visit to New Delhi to meet with Indian regulators.”