We are discussing how technology will evolve and shape future financial markets. Today, innovation and regulation are not always inextricably linked. Where do you think the role of regulation in VDA and Web3 technology is?
New technologies constantly require regulation to evolve rapidly to address them. There is always a balance between regulation and innovation. When it comes to regulation, it is necessary because the government must take into account the interests of participants of all kinds in different markets. In many cases, participants must be protected from illegal activities. In the Ponzi scheme, people’s money is robbed, but not properly invested.
Second, because there is always a lack of fair competition and there are always concerns that there are people in the market who have information that others do not have, as this economy is called information asymmetry. It is a place of equal competition for all participants in the market, which can only be achieved by regulation.
The third reason that regulation is needed is to prevent unauthorized use of various powerful technologies.For example, digital or Cryptography Assets, which can be used for illegal financing of both criminal and terrorist activities. These are three or four important reasons why regulation is needed.
Everyone knows that innovation brings new use cases, new productivity, and ways people can do things they couldn’t do before. As far as Web3.0 and crypto assets are concerned, there are many use cases that are far more productive and powerful than existing methods.
For example, today, when remittances are sent between markets, they often pay 3, 4, 5, or 6%, even at the same friction cost as the cost to the intermediary when making the remittance. Therefore, if you send $ 100 from the Arab Emirates to India, you may in some cases pay $ 3 or $ 4 as a fee for virtual digital assets, and these transfers are very efficient with little friction. can do.
So instead of paying a fee of $ 3 or $ 4, you might be able to do it for about $ 0.3 for 30 cents. By doing so, you can reduce costs and do things much more efficiently and quickly through innovation. But again, there are risks that you have to manage, whether there is innovation or things get easier. It requires a balance between regulation and innovation. Policy makers are always doing this, and even when the Internet started, for example, new regulations had to be put in place, such as mediators and the use of data. Therefore, regulations continue to evolve as we need to make sure that the public interest is fully protected.
Now you are the chairman Treasury Standing Committee.. Can you hint at the recommendations JPC has made for virtual digital assets?
So far, there are no recommendations. We had one interview with various stakeholders related to virtual digital assets and had a very long discussion with various different stakeholders. It was a very informative and productive debate, which expected the government to introduce a crypto bill.Of course, the government decided to wait a little longer to have additional talks with stakeholders before preparing. Cryptographic bill Therefore, even after the government takes a position on crypto assets and submits a bill to regulate crypto assets, we will continue to discuss with crypto stakeholders.
Meanwhile, the government has introduced a taxation framework for virtual digital assets, which was discussed as part of the budget deliberation, and of course this year’s budget was passed and enacted after April 1.
Cryptocurrency assets are important to blockchain technology because there are important use cases for blockchain technology. There are news reports that the government plans to regulate it.What do you think of the government’s current attitude of not regulating? Metaverse Or Web3.0? Can you clarify a little about it?
I can’t really comment on government policies or their views on this. It’s not appropriate and you have to wait for the government to finish the consultation process before issuing a white paper or crypto bill to discuss and discuss it. Hopefully we can also evaluate in detail about our committee. You have to wait for the process to run.
In the meantime, there are very important use cases. An example of remittance has already been shown. Land records, for example, have other important uses. For example, in smart contracts, there are various ways in which blockchain and the Metaverse can play a very important role in India’s economic growth.
We are already leaders in many types of games, animations, virtual worlds, and making blockchain and decentralized leisure technology available for these purposes is my goal. It will be very useful as part of us to grow and as part of our leadership in these new technologies.
India is a software superpower, but still miles away from the blockchain revolution that is happening around the world. How can I catch up? What do you think about this?
I disagree with it. In fact, we have many smart young people, many teams working on different use cases that are uniquely customized for the Indian situation, many of which have already been scaled up and tested. increase.
Of course, there is no financial aspect at this time just because we need to come up with an appropriate regulatory framework for virtual digital assets, but various use cases have already been tried and experimented. We have the third largest startup ecosystem in the world and there are many very well funded startups. If a regulatory framework is implemented, I think we can incorporate financial aspects into it.
There are many use cases that don’t really require a monetary part, and they could be just applications or blockchain technology, just like smart contracts.
Do you think digital assets and NFTs are potential investment tools in the future?
absolutely. In the future, virtual digital assets and NFTs will be a very interesting asset class as they will be linked to specific use cases that make existing solutions quite outdated. For example, if you want to take advantage of NFT’s ability to protect ownership of digital assets (for example, if you have a photo that is a digital movie), you can use NFT to protect that ownership. If you have all kinds of digital art, you can take ownership of it. Iconic photos and landmark photos can be protected by NFT. Therefore, the Metaverse has a very good use case that can be protected and moved from one owner to another via NFT.
As you spend more time on the Metaverse, NFTs become very important. Already spending a lot of time on smartphones, PCs and different types of screens, most people spend some 3-4 hours a day between TVs, phones and other devices. It will increasingly move to the Metaverse, allowing us to embark on a much wider range of interesting and exciting applications. After spending four, five, or six hours a day in the Metaverse, you’ll need to: Protect our property and digital assets.
That’s why NFTs are a great application and people need to do it. You also need to be able to trade when you are in the Metaverse. We encourage you to purchase the specific experience, digital art, and specific properties you want to display in the Metaverse. Therefore, you need to trade and you will need a crypto token to be able to trade. That’s what we do in the real world.
Therefore, as you spend 4, 5 or 6 hours a day in the Metaverse, you need to be able to trade there as well. This is unavoidable and will be necessary. How it is shaped will be a balance between regulation and innovation. The roles of various crypto tokens, crypto assets, and sovereign digital currencies evolve over time, but this trend is unavoidable. In fact, we go online in the Metaverse for quite some time a day and need a full range of virtual digital assets and a full range of crypto tokens.