Digital Currency Conclave 2022 Day 1 Live News: Amid Covid-19 uncertainties, Bitcoin, Ethereum, and other cryptocurrencies have garnered significant attention in India and across the world. Many see digital currencies (including private cryptocurrencies) as the future of finance. However, in the absence of regulations, cryptocurrencies are currently reduced to being a speculative asset class with extreme volatilities.
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According to the latest research by Markets-and-Markets, even banks have started buying crypto for the first time. Banks in the US are creating their own blockchain-based systems, including digital currencies, to enable B2B cryptocurrency payments between their customers. In October 2020, PayPal announced that its customers will be able to buy, sell, and hold Bitcoin and cryptocurrencies using their PayPal accounts. The cryptocurrency market size is expected to grow from $1.6 billion in 2021 to $2.2 billion by 2026, at a CAGR of 7.1%. Transparency or distributed ledger technology and growth in venture capital investments are the key factors driving the growth of the market.
While crypto/digital currencies and blockchain, the tech behind digital currencies, are growing at a rapid pace in India, there are several contested issues on which clarity is required. During the two-day Digital Currency Conclave organised by financialexpress.com, experts will weigh in on all such contested issues and discuss the way forward. The topics of discussion include the need for digital currency; the role of digital currency and assets in a modern world; the socio-economic impact of digital currency; the need to legitimise digital currency; fighting financial frauds; building digital assets and cybersecurity and the need to build strong walls.
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Digital Currency Conclave 2022 Live: Importance of Digital Currency and Its Role in Modern India Live News
“The first thing is to really understand that it is based on a completely different philosophy from the existing financial system. So this is a sort of asset class where you are the bank, you own your keys and you bank your assets. So all risks fall on the consumer.
“This is a global asset, which trades 24×7 there is no regulator…so there is lot of inherent volatility and it is going to stay.
Experts agree that contribution of crypto in one's portfolio should be 1-5%. They unanimously say that don't invest in crypto unless you understand it.
Jalak Jobanputra, Founder and managing Partners, Future Perfect Ventures: “You have to have a longer-term time horizon. At least 1% of ones' portfolio should be in crypto, as it is the future…”
Avinash Shekhar, Co-CEO, ZEbPay: “We should be looking at a very small part of the portfolio in crypto. It could be 1%, 2% or maybe 5% initially. Then one should try to understand the technology and crypto markets to develop and understanding.”
Tanvi Ratna, CEO, Policy 4.0: “Crypto in itself has diversified in terms of types assets. For people who are in any area of technology, they will find some basket of tokens in which they can invest…I would say invest in what you know. I would not no put a number on how much one should invest.”
Shailesh Lakhani, MD, Sequoia Capital: “You should do tons of research… I would say 5% is the high-level number, stick to it in mainstream assets, then look for others after doing lots of research….”
Manisha Kapoor, Secretary General, ASCI: I think people should understand that this is a new kind of investment. Certain risks are there. Therefore in any new kind of investment, one should invest only that amount they can afford to lose.
Polytrade CEO Piyush Gupta says returns for investors on Polytrade would not be affected by the ups and downs of crypto markets.
“Depositor in banks are not getting anything out of it (their deposits). Our idea is to remove intermediaries and give returns to depositors.”
“We are trying to bring trade finance product to both lenders and borrowers.”
“As per World Economic Forum, there is a $1.8 trillion gap in trade finance space. When it comes to SMEs, 60% of trade finance requests are rejected. Polytrade is trying to disrupt this space by using this gap so that we can provide as much as liquidity needs to SMEs.”
“I now believe that we should bring three different laws to regulate cryptocurrency in India:
“First, Digital Rupee law, like we had earlier for coins and paper notes. Time has come for digital currency to be issued as the currency for the country. This law can be used to ban private cryptocurrencies, except for some stable coins and in-platform cryptocurrencies.
“Second, Business laws to regulate smart contracts, as the current Contract Act does not deal with smart contracts. This will bring smart contract businesses under regulation.
“Third, we have a special law to deal with securities and contracts. Likewise we should have special law to deal with digital assets.
“if we bring these three laws, we will be able to deal with this issue comprehensively…we will be able to give a fillip to this technology which is going to be very useful.”
– SC Garg
“My sense is that the Government and the Reserve Bank have not materially moved from the original concern which they had – of the cryptocurrencies being a competitor to the rupee.
“The Government is getting sensitive to the asset aspects. Cryptocurrencies are not just currencies. They are much more than that. Therefore a complete ban would not be in order,” says SC Garg.
Subhash Chandra Garg says: “My sense is that the Government and the Reserve Bank have not materially moved from the original concern they had – of the cryptocurrencies being a competitor to rupee.
“The Government is getting sensitive to the asset aspect of cryptocurrencies… Cryptocurrencies are not just currencies but much more than that. Therefore a complete ban would not be in order.
“My sense is that it has not been figured out fully how to deal with cryptocurrencies. The solutions to deal with that are not clear to the Government.
“The Government should come up with a most comprehensive type of bill…I think Govt will not be able to prevent stablecoins use or in-platform use of crypto assets.
“I think we should wait for the Bill to come.”
“My sense is that the decentralised mode is going to be quite competitive, maybe more efficient and certainly it solves the issue of trust much more, because you are not subject to any centralised controllers. But it does not mean that it is going to completely vanquish the centralised technology and systems. I think both of them can survive and improve. The bulk of the payments and businesses might continue to be centralised but the growth would come phenomenally from Decentralised technologies…,” says Subhash Chandra Garg.
Stablecoins have taken away discrepancies with fiat currencies international transfers. And this is likely to grow
While talking of cryptocurrencies, three use-cases need to be dealt with – Bitcoin as general currency, in-platform currencies and stablecoins for international transfers, says Aggarwal.
“The Cryptocurrency phenomenon started with Bitcoin, which was supposed to replace fiat currencies. Problems in international payments and the governments' total control over fiat currencies were two reasons for Bitcoin argued by its designers,” says Subhash Chandra Garg
Subhash Chandra Garg, Former Finance Secretary, to kickstart the Digital Currency Conclave with the keynote address on Digital currency and its role in Modern India at 10 am.
As the RBI readies to roll out its own digital currency, there are many others too in the market currently. In a modern and digital India, what is to own cryptocurrency and the role it is expected to play as an investment course and transaction.
