As the debate on the future of virtual cryptocurrencies heat up in India, former Finance Secretary Subhash Chandra Garg said on Friday that the upcoming crypto bill should ensure it does not kill new innovations around Blockchain, and create an ecosystem that actually promotes the technology while taming riskier private cryptocurrencies. 

Blockchain-based financial solutions like decentralised finance (DeFi) can prove much useful for the Indian ecosystem in the future.

DeFi is a collective term for financial products and services that are open, decentralised and accessible to anyone. DeFi products open up financial services to anyone with an internet connection and they are largely owned and maintained by their users.

“So far, every financial services provider in India works on centralised database. Decentralised financing is developing fast and India must embrace that technology based on Blockchain technology. At the same time, crypto assets and currencies need to be tightly regulated and legislated so investors remain safe,” Garg told IANS. 

According to him, the phenomenon of crypto is unusual and the world has seen nothing like this, to date. 

“Technology has its own force that drives adoption. However, crypto is not a conventional product, or a service, an asset or a currency. Policymakers are definitely struggling with how to deal with it. Once the regulation for defining crypto sees the light of the day, then only then can we review what actually is being regulated,” Garg explained. 

“We are going through a mega churning around crypto platforms, services and assets like NFTs (non-fungible tokens), DeFi platforms, digital coins and more,” he added. 

Although various crypto platforms have now stopped the flow of “irresponsible” ads on investing in cryptocurrencies while promising wild profits, the whole landscape is fast evolving and policymakers have a tough task at hand.

“The policy debate should be viewed from the whole tech base (Blockchain and cryptography) and reach a point that caters to the larger ecosystem that does not promote wilder, riskier virtual currencies but the wider technology,” said Garg who headed the inter-ministerial committee (IMC) that drafted the cryptocurrency bill entitled “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019”.

The government aims to table the crypto bill in the winter session of Parliament commencing from November 29, amid grave concerns now being raised over the misuse of digital coins on the Dark Web for terror acts and drug trafficking by militant organisations, money laundering and hawala-based transactions — posing a severe threat to the national security and a big challenge to the security agencies in India.