No matter how trenchant one’s arguments are or how deep-seated one’s fears are, there is nothing like the good old Bohm Dialogue
As long as it is not a Manchester vs. Liverpool bar or some Crocs on a ramp-walk, almost any conflict can be resolved when both the sides can pull some chairs and take a tea-break. Looking at each other’s point of view, in an objective way, helps. But what really welds the gap is the intent of getting to a middle ground.
That is exactly what transpired during a webinar titled ‘Cryptocurrency in India- What the Future Holds’.
There were staunch, and passionate, advocates from the crypto industry, legal experts and industry champions on one side. On the other side, there was Subhash Chandra Garg, former Department of Economic Affairs (DEA) secretary, and head of the Inter-Ministerial Committee on Virtual Currencies.
No. There was no blood, or milk, spilt at any spot. And still, it was quite a boxing match. Because, perhaps, for the first time the supporters, sceptics and critics were able to empathise with a different point of view.
DLT – Good. Commodity – Good. Currency – No
Like what Mr Garg put forth first. The committee that was working on the draft bill studied the advantages of DLT (Distributed Ledger Technology) too. He hinted some admiration for the beauty of DLT, albeit, with concerns over aspects like – is it a common man’s technology, does it not need high IT investments, how dangerous is the private part of this technology? But, all in all, he gave hope that even if crypto’s role as a currency or as replacement of payments is out of the question, there is a strong future for its use as an asset. “It may have its intrinsic value depending on how the holder sees it. It can work, and be regulated, like any other commodity. Crypto – as an asset- can be anybody’s right.”
While DLT was appreciated as an exciting, and practical, breakthrough; apprehensions on crypto persist. They came out in a good, and neutral, light here. Regulators may be worried because of the kind of fluctuations that this type of money manifests. They are worried about gullible people who may not be savvy, or financially-sane, enough to protect themselves from frauds.
Why Ban Crypto?
These concerns were understood, and addressed, well by people who believe in crypto. As Sidharth Sogani, founder and CEO, CREBACO Global Inc, reasoned in an interesting way, when the Wright Brothers first came up with the Aeroplane they had no idea about its strengths and risks. They tried, experimented, figured it out and over all these years; we have safety measures and standards from aviation regulators. “We should give Crypto a chance to go from 0 to 50 in speed; as it is still finding its own road. Once it hits 120, the regulators can definitely come in- and together we can ensure that we are driving in the right direction.”
India is a $12.9 billion potential market, with 5.5. million users and 20,000 job opportunities
It seems like most people are not against regulation, they are just worried about outright bans. “Do not criminalise it. Regulate it.” As Sogani stressed. That sentiment came out from other advocates too. Nischal Shetty, founder, WazirX, also added that crypto-supporters do not necessarily want to replace government currency. “It is quite robust so why should we replace it. But crypto can be an enabler of new transactions and micro-payments that will need some form of support in the Blockchain-driven world next.
Garg here refuted the idea of using crypto for capital and highlighted how fraudsters and greed tend to overpower intelligence, and good intent, with most innovations. But he agreed to the contentions of delay and bureaucracy that existing international transfers tend to entail. He hoped to find an answer and a platform like UPI which can allow people to transfer funds globally as easily, and inexpensively, as they do in India.
Counterfeit vs. Trust. Fear vs. Demand
Another fear that he pointed at was the amenability of this form of money as counterfeit money. This was answered by Sogani when he explained how crypto has its own Blockchain process for generation and storage. “It does not require a third-party to honour it – the way it happens for a bearer note. The value in crypto comes from the consensus and trust that is inherently built in the technology. The more people use it, the more people trust it. Mathematics cannot go wrong, or be manipulated.”
What also came up was the excitement and appetite that is re-incarnated in the Indian market after the Supreme Court’s decision this year. Note that the apex court had rescinded the Reserve Bank of India’s (RBI’s) guideline to banks of not allowing them to deal with exchanges providing trading facilities in crypto or virtual currencies.
Shetty shared how there is a spurt in crypto after the SC announcement. “Especially in the lockdown, we have seen more and more people expressing interest in digital assets. Even some banks have evinced curiosity for faster and innovative moves as they want to stay at the same pace as their global peers.
Tulips or Sunflowers
In this webinar – that was organised by Credit Rating for Exchanges, Blockchains and Coin Offerings (CREBACO), in association with leading law firm Khaitan & Co – Garg underlined an important concern – about anonymity and traceability aspects which make crypto attractive for illegal activities. He also cited plantation scams and Tulips to explain how easily retail investors can get duped. Sogani and Shetty suggested that the industry has come up with, and is working on, tools to resolve those problems. As to scams, they have happened on the non-crypto side of finance also, and all these years, they reasoned.
Greed overtakes intelligence: Subhash Chandra Garg
Do not criminalise it. Regulate it: Sidharth Sogani
Regulators have to protect the common man – there is no arguing with that, they repeated. But as Rashmi Deshpande and Sanjay Khan Nagra, partners, Khaitan & Co added, the layman and businessman alike need tax clarity. There is a lot of excitement about crypto-ventures and investments but that is often clouded with confusion on where the law actually stands.
Crypto is just too big to ignore. Looking at the other way will not solve the dilemma, conveyed the supporter side in unequivocal terms here. Instead, we should learn how to avoid risks and move smartly by taking lessons from Japan – example, regulate the entry and exit points and let the intermediate parts function in a free and decentralized way. Because, anywhere in the world where people have the Internet, banning crypto would not be a practical option and most countries have realized it. The attention that is coming from G20, FATF and JP Morgan iterate this shift.
India, with its innate strengths in Mathematics and technology, cannot ignore this wave for sure. Why not take a lead? Why not find a middle ground? Why not create sand-boxed approaches? Why not allow controlled adoption? Why not make a good standard for compliance (for fund-raisers and exchanges, for instance) but also help the industry evolve? We can get the world’s attention and a lot of global investment if we can get in the front row for Blockchain and non-retail side of Crypto, argued Sogani.
Looks like that middle ground is already being scratched with such discussions. “We should keep having these discussions to understand each other’s perspectives and concerns. We can reach a consensus someday this way.” Nagra concluded.
Who knows the two opposing voices are actually on the same side of the table, but on different chairs! Neither of them argued against innovation, protection of the common man, speed and simplicity after all.
This webinar and ensuing discussions show that there is never a dearth of chairs and glasses when we want to find a solution to a conflict. All we need to, sometimes, do is – Get Mary’s room.