The National Institute for Smart Government (NISG) of India recently published a draft blockchain strategy. In the strategy, there are suggestions that India could launch a central bank digital currency.
Digital Rupee Proposal
The draft strategy proposes the launch of a digital rupee that would run on a permissioned public blockchain. India has thus far launched various large projects. For instance, it rolled out the national identity project called Aadhaar that covers its population of 1.2 billion people. However, there are just 582 million bank accounts. This is quite small considering that it is a nation of 1.2 billion people. As a result, the launch of a central bank digital rupee would make a lot of sense.
The major rationale provided in the draft proposal is the monetization of the Internet of Things and personal data. For instance, it proposes compensating people when they share their financial and telecommunication data. By unlocking the potential that data generated by its citizens holds, it could provide citizens with a disposable income.
The proposal foresees a situation where blockchain developers come up with DApps that are similar to EOS and Ethereum. However, these DApps would be regulated and incorporate aspects of consumer data protection.
As a result, the draft document proposes the creation of a permissioned blockchain. This blockchain would allow government agencies to run validator nodes. It proposes creating a private version of Ethereum, something akin to Quorum. According to the proposal, the blockchain platform could offer Trust as a Service. It points to various enterprise-blockchain solutions that make private blockchain more tamper-proof.
India is Serious about the Blockchain
This draft points to the fact that India is serious about the blockchain. It is thus encouraging the creation of a vibrant blockchain sector in the nation. The document also looks into the legislative aspects of the blockchain in India.
The nation has some very tough rules when it comes to crypto. This document suggests that any legislation should focus on addressing functionality instead of any specific technology. This draft was created after extensive consultation and NISG is not looking into engaging stakeholders further on the issue.