The website Forkast.news asked me about two questions that related to the will-they-won’t-they regulation of decentralised ledger tech in India.
(1) “The impact of a crypto payments ban on the NFT, blockchain and DeFi space since transaction fees need to be paid in crypto.”
Gaitonde, the crypto investor and company advisor, said that the rules as outlined in the draft bill will allow people to buy and sell tokens but potentially exclude Indian investors from participating in the broader decentralized ledger technology ecosystem.
“If crypto regulations state that only licensed crypto exchanges can hold tokens, the universe of crypto projects available to people shrinks greatly because it is impractical for any such exchange to list tokens from every decentralized project,” Gaitonde said.
“Similarly, if regulations forbid the use of non-custodial wallets, then DeFi projects, NFT marketplaces, decentralized software or dApps, blockchain-based games and such innovations become inaccessible,” he added. This is because the decentralized world largely supports such wallets — which are used to swap NFTs and other artifacts with crypto tokens.
(2) “Do you think [the proposed punitive measures are] more stringent than what the crypto community was expecting given that violations will be treated as a cognizable crime alongside murder, theft and kidnapping? “
… [a]ccording to Rahul Gaitonde, a crypto investor and adviser to blockchain companies, the harsh ban on crypto should not come as a surprise since an earlier crypto ban bill draft from 2019 also recommended treating infractions as cognizable offenses. The “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019” draft reportedly forms the backbone of the current bill.
However, Gaitonde is still hopeful the final bill will allow more flexibility with cryptocurrencies since the government has held multiple consultations with industry experts and has expressed an interest in preserving innovation.