(Manish Kumar and Neera Imandar are Co-founders of RealX, a blockchain based platform for fractional ownership of Properties. The shift to meaningful tokens may only be for the better. However, the silver lining is that they may shift to trading in the tokens that may get more legitimacy once the bill is cleared. The crypto exchanges may lose trading of many of the older tokens that may get banned. There can be many more applications that may be fostered in a more structured and clearer environment that may follow the Crypto bill. With an RBI issued CBDC, we can usher into a very different transaction ecosystem with near-immediate payments and settlement of such transactions even in assets like Real Estate. However, we believed until the government brings in more clarity on proper definition and recognition for Digital Assets, it may be risky to Tokenise Real Estate, despite being ready with the technology to do so. In our own case at RealX, we had created a legal model for digital co-ownership of properties with co-ownership information maintained on PropChain (our BlockChain solution). Such tokens can represent true ownership of real assets (like art, real estate etc.) or may represent a beneficial interest in an income stream (like investing in a Solar farm to produce electricity). This small but significant enabling provision can lead to new kinds of cryptos that may survive the ban. The Crypto bill also envisages an enabling room for certain exceptions to the ban to “promote the underlying technology of cryptocurrency and its uses”. However, the same crypto technology can be used to create many crypto products and solutions that can enable some real useful purpose. Much of the crypto limelight has been hogged by those who have a vested interest in promoting the current crypto tokens.
The principal justification was how the country may be deprived of the benefits of the underlying BlockChain technologies. Since the Crypto bill was enlisted to be considered by the parliament, there is a significant amount of noise about how the ban on private Crypto tokens can be very regressive. This created a new asset class and a need for serious consideration to the Digital Assets. Such investments were made with smaller amounts as people were testing waters. Much of the crypto tokens created and traded were fun cryptos that people had fun investing in with small amounts leading to more and more people joining the crypto party.
People started creating NFTs of photos, collectibles, memes etc. The latest crypto interest has been in NFTs or Non-Fungible Tokens that give you part ownership of any digital asset. Later, they became highly traded only because of the trustless architecture of public blockchains underlying them. The first tokens envisaged to become a replacement to fiat currency and therefore they were called cryptocurrencies. What we saw so far was mainly a shallow use of the technology. Crypto technology can enable a lot of good use products and solutions. The RBI has been consistent in its messages and warnings that it is not comfortable with cryptocurrencies and investors may lose all their invested capital. The crypto bill envisages creating an enabling framework for a Central Bank Digital Currency, for the RBI to create the Crypto Rupee. This is a good time for the government to bring in some sanity and order to the market before it gets to the point when mass participation explodes further, and people begin investing significant amounts they cannot afford to lose. So, we may have many people joining the party, they have not yet played big money at the roulette. According to RBI, 70% of crypto investors have only invested less than Rs 3000 so far. While not much is clear about the contents of the bill, prudent that the government did step in now. The Government of India will be tabling a Crypto regulation bill in Parliament that is expected to ban all private cryptos. Something similar happened to this party too. The government allows parties to continue to a certain point and wants them to end by a certain timeline in every city.
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