Aadhaar architect Nandan Nikelani has once again called for encouraging the use of cryptocurrencies as an asset class, to be bought and sold like a commodity amid reports of India relooking at regulating the market. “Just like you have some of your assets in gold or real estate, you can have some of your assets in crypto…I think there’s a role for crypto as a stored value but certainly not in a transactional sense,” Nilekani told the Financial Times in an interview. He added that allowing individuals and businesses to tap the $1.5 trillion market would allow “the crypto guys to put their wealth into India’s economy”.
During a Clubhouse session as well in March this year with Silicon Valley angel investor Balaji Srinivasan and Blume Ventures’ Managing Partner Karthik Reddy, Nandan Nilekani had argued for allowing people to use crypto. “We should think of crypto as an asset class and allow people to have some crypto. Crypto as a transaction medium will not work as fast as UPI, which is targeting a billion transactions a day. However, crypto has enormous capital,” Nilekani had said. He added that India needs to look at how it will help Indians, how MSMEs can access capital using bitcoins. “No amount of tech is going to sway anyone’s view.”
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Nilekani had earlier backed startups such as Tracxn, RailYatri, ShopX, Power2SME, Ninjacart, Fortigo, etc., and set up a venture capital fund called Fundamentum in 2017 along with Helion Ventures co-founder Sanjeev Aggarwal. His reiteration of crypto usage has come amid the growing adoption of virtual currencies particularly Bitcoin among corporates and institutions including Tesla, JPMorgan, Visa, MicroStrategy, PayPal, Goldman Sachs, etc.
Importantly, among the watershed developments in crypto space, the Central American nation El Salvador on Saturday had announced plans to make Bitcoin a legal tender. Separately in a Twitter thread, El Salvador President Nayib Bukele said “Bitcoin has a market cap of $680 billion dollars. If 1% of it is invested in El Salvador, that would increase our GDP by 25%. On the other side, Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances. The adoption will make El Salvador the first sovereign nation in the world to do so.
Back in India, the Reserve Bank of India (RBI) had last month asked banks that they cannot refer to its 2018 crypto-ban order, which was quashed by the Supreme Court last year, to caution their customers against dealing in virtual currencies. “It has come to our attention through media reports that certain banks/ regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular dated April 06, 2018,” a notification by RBI had said.
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