India faces severe crisis in absence of regulatory framework for Blockchain: Incrypt

In the past few months, blockchain based currency has come under a strict scanner in India. The government is ruthlessly cracking on businesses related to cryptocurrencies.

In April, the Reserve Bank of India (RBI) put a final nail in the coffin with its decision that directed all regulated entities, including banks, e-wallets, and payment gateway providers to stop dealing with individuals and businesses in Bitcoins, Litecoins, Ethereum and other cryptocurrencies.

Amidst the severe crackdown, a recent report by blockchain community, Incrypt has shown the possibility of an outflow of blockchain developers from India if the negative attitude of the government towards the cryptocurrency persists.

The research said that over 80 per cent of blockchain developers in India will be forced to move abroad or work only on foreign projects if the government does not adopt a robust regulatory framework soon.

Many such developers and startups have already shifted their domicile to nations like Singapore, Dubai, Estonia, and Switzerland that offer tax incentives and e-residency for startups.

The Bengaluru-based community found that in absence of a wholesome framework for blockchain the country is losing out on jobs, drag in capital infusion, lack of innovation for local problems, talent flight, and setback in global positioning.

The report has also suggested that the country needs to move fast in putting in place appropriate regulations to manage risks and attract global investment in the blockchain.

The government can’t afford to take a partial approach when it comes to blockchain adoption where it will push forward the use of blockchain technology in various sector and deemed the cryptocurrency illegal, notes the report.

The research paper explained there are various open source and freelance job opportunities to support large public blockchain projects and they come with token-based incentives. It means that payments for working on these projects are often in cryptocurrencies.

In this case, an Indian developer will never be able to receive tokens if he/she cannot convert it into Indian rupees.

The paper also highlighted that how India is also losing on the capital front. It further explained that in terms of VC funding for such startups, the country has been managed to secure only $5.3 million raised in the last two years, as opposed to over $2 billion invested in blockchain equity deals globally.

It also suggested that regulating fundraising through ICOs will significantly improve access to capital for early-stage ventures.

The story was first reported by Economic Times.