Indian technology mogul Nandan Nilekani has urged local lawmakers to allow citizens to speculate on crypto assets.
Nilekani, the co-founder and chair of Infosys — an Indian multinational information technology firm — urged regulators to embrace digital assets and get a handle on accommodating the technology.
Speaking to the Financial Times, Nilekani warned that prohibitive regulations could result in significant missed opportunities for India, asserting that a more permissive approach would let the country tap into the $1.7 trillion digital-asset market and allow "crypto guys to put their wealth into India’s economy."
However, Nilekani is not bullish on an unfettered crypto market for India, asserting that cryptocurrencies are too volatile and energy-intensive to use as a means of payment. Instead, he believes the Reserve Bank of India’s Unified Payments Interface infrastructure offers a superior infrastructure for real-time payments.
The tech mogul advised allowing Indians to access crypto assets for speculation and as a store of value, stating:
“Just like you have some of your assets in gold or real estate, you can have some of your assets in crypto. I think there’s a role for crypto as a stored value but certainly not in a transactional sense.”
Nilekani has long worked alongside Indian authorities to help formulate policies on digital technologies, including the Aadhaar biometric identity program launched in 2009. In December 2016, he joined a committee to investigate how people in India could use digital payments to a greater extent, and in 2019, he chaired a central bank committee on digital payments.
With India’s enormous tech sector and unbanked population, the country could be a global hub for crypto-asset adoption. Yet the regulatory situation remains unclear, with conflicting signals coming from the policymakers and the central bank.
On May 19, Cointelegraph reported that the formulation of a newregulatory panel dedicated to digital assets could pave the way for more clarity on the situation.
The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 was scheduled to be addressed in parliament in March, but it was deferred for reasons not made public.
The RBI had banned all banks from allowing customers to trade crypto assets in 2018; however, it was overturned by the Supreme Court in February 2020, leading to renewed hopes.
However, much of the industry still operates in a gray area despite the massive activity on crypto exchanges and sustained retail demand in recent months.