The Reserve Bank of India (RBI) is an Indian central banking institution who has made an announcement of plans for the creation of a regulatory sandbox. The regulatory sandbox will be created for FinTech startups. Blockchain applications are included in the plans. Cryptocurrencies and Initial Coin Offerings (ICOs) are excluded in the plans.
The blockchain industry is in the budding phase in India. Most of the blockchain industry players are facing problems. India has around 100 blockchain startups at the current. Most of them have gone for ICOs for raising funds.
There are more than 30 thousands of active startups in India. Each one of them has their own expectations from the Union Budget 2019. The thing is that whether the finance minister Nirmala Sitharam take up the concerns of a few blockchain startups.
However, the blockchain has been effective and transparent in sectors like banking, land registry, supply chain management, identity management, voting, education, healthcare, agriculture, etc.
Though India is recognized as one of the world’s largest technology markets, it is far behind in terms of the blockchain-related talent pool, funding and the research & development (R&D). India stands in the sixth position in terms of patents. It has only 67 blockchain patents approval in the year 2018. While China stands in the first position. China has around 790 blockchain patents approval. The US has around 762 blockchain patents approval. South Korea, Australia, and Canada have 161, 136, and 67 blockchain patents approval respectively. Knowing the limitation and scalability of a particular technology is possible when it goes through an implementation. The implementation is considered as the best form of R&D where the technology goes through the actual market tests.
Narendra Modi said that the nature of employment can be changed through new technologies [Artificial Intelligence (AI), Machine Learning (ML), Big Data, and the Blockchain]. More opportunities can be created in the country with new technologies.
The Union Budget 2019 is expected for more funds for tanks, research grants, actual pilots, and, startups. India is believed to have a lot of human capital. While startups are believed to be eager for the development contributions of the blockchain. Talents can be provided with the right opportunities with the support from the Union Budget 2019. Their experience can be grown. They can even make India a blockchain leader.
Blockchain startups can be funded in multiple ways. Understanding related to the technology lacked and regulatory frameworks for trade governing through distributed ledger technology (DLT) lacked made the blockchain space less active in the area of the deals which are financed by Venture Capitals (VCs).
The blockchain can be used to reduce land deals-related court cases in more numbers.
The Telecom Regulatory Authority of India (TRAI) is a statutory body who can make mandatory to leverage the blockchain for the tracking of spam messages. The regulatory sandbox will have to work under the legal system. A sandbox will not be provided for crypto trade now. The Union Budget 2019 is asserted to pave the way for the creation of blockchain labs around the country. Technical problems could be solved with the help of the blockchain labs. Unlimited impacts can be there from the blockchain labs.
Most of the Indian Institute of Technologies (IITs) are working actively on multiple blockchain projects. National Cyber Security has commissioned a blockchain project to IIT-Kanpur. The project is worth $5 Million. It will be developed for e-governance. More than 90% of Indian blockchain projects didn’t cross the Proof-of-concept (PoC) phase. State governments of Andhra Pradesh, Telangana, and Karnataka are organizing multiple blockchain events. They are still behind for adopting blockchain solutions.
It is not easy for startups to engage with PSUs during the time of tenders and RFPs implementation. The PSUs can be allowed to have an innovation fund for making investments into AI and the blockchain. Startups can go through RFP route as most of the AI and blockchain companies are small and young and they find difficult to go through RFPs. Startups can reach out to PSU easily with the help of the idea of the innovation fund. While the PSUs can have better access to the new technologies.
An account related to the slow blockchain adoption and acceptance is given. Submission of PoCs slew is already done to multiple state governments in sectors like transportation, land acquisition, energy, and many more. State governments of India are waiting when the Centre will provide its guidance on the issue. A state of confusion is seemed to have at the governance level. Talents and startups are going from India due to a long waiting period. The blockchain is recognized as an essential technology and reports are created.
The blockchain is promised to explore proactively for using in the digital economy. The finance minister Nirmala Sitharaman has made an announcement of plans to establish a distributed inter-institutional Centre in the blockchain. The Centre in the blockchain can be established with premier academic institutions, government departments, research institutes, Ministry of Electronics And Information Technology (MeitY) and Centre for Development of Advanced Computing (C-DAC).
A budget outlay of 13% which is higher than the revised estimates of FY19 presented by Interim Budget February 2019. The thing is that how much space Sitharaman has in dedicating resources and time towards the expectations of the blockchain startups which they have from the Government and the Union Budget 2019.