India: National Blockchain Policy Stakeholders Emphasize the Importance of DLT Regulations

According to a report by The Economic Times published on January 28, 2020, India’s National Institute for Smart Governance (NSIG) – a public-private body promoted by the Central government and software industry lobbying group NASSCOM – has recommended that laws and regulations should cater to the functions performed by technologies such as blockchain and not to the technology itself.

NSIG Makes Recommendation On National Blockchain Policy

The recommendation to focus on the functions performed by distributed ledger technology (DLT) has made by the NSIG in the draft national strategy on blockchain policy. For the uninitiated, in July last year, the National e-Governance Division (NeGD) – under the Ministry of Electronics and Information Technology (MeitY) – had tasked NISG with preparing the policy.

The policy document reads in part:

“Public statements, whether through the press or formal speeches, are helpful but are not official statements of application by the agency. If an agency intends to enforce its laws in new and innovative ways, it must first notify industry stakeholders of its intent to do so and the way in which existing law applies.”

Stakeholders, such as NSIG, stated that the suggestion was made following the experiences of cryptocurrency startups in the Indian ecosystem which primarily use peer-to-peer models to circumvent the strict restrictions imposed by the Reserve Bank of India (RBI).

More Stakeholders Meetings Upcoming

Per sources close to the matter, the national strategy blockchain policy paper also suggests the establishment of an organization to coordinate DLT strategy across various stated bodies. The paper reads:

“Given the multi-tiered and multistakeholder structure of regulation, a coordinated approach across departments and sectors is necessary. Not only would this office work to determine applications of blockchain that could cut costs for taxpayers, it could also provide a gateway for entrepreneurs to best understand the laws surrounding blockchain and virtual currencies.”

Notably, the NISG added that it would conduct stakeholder meetings association with NeGD across some cities in the country to define the ecosystem for blockchain in India. Surprisingly enough, the policy also states that there is a lack of regulatory clarity and not enough awareness in the government on the technology.