Global Impact FinTech (GIFT), Government Blockchain Association (GBA) and the Centre for Internet and Society (CIS), India, have said that under the proposed rules, Meity would have tight control over blockchain in India hobbling limiting innovation.
IT industry lobby group NASSCOM has also said that where the government intends to engage in blockchain regulation is ‘unclear’ and the industry wants more details on the ‘role of the government’.
Meity had invited stakeholder suggestions by February 16.
In its response, the India chapters of global lobby groups GIFT and GBA in a note have said that it is ‘’too early” for the government to come out with a regulatory framework.
“It is recommended that the government does not create any framework for the time being and allows the ecosystem to evolve freely with the active support of the government. Such a framework, when created too early, without adequate understanding of what may be needed and when the ecosystem is not yet mature may not be successful,” they said in a joint response to the MeitY paper on national strategy for blockchain.
It further stated that the best way for the government to nurture a blockchain ecosystem in the country is by becoming a customer of some blockchain applications. This will allow startups build, operate, and run the projects for prolonged durations and capture learnings, it said.
“Between the various arms of the government across the central and the state governments, there can be an immense amount of direct engagement that can be done to ensure start-ups get real time projects that they can implement with the government. This will provide government wide ranging experience of what works and what does not,” the joint response noted.
NASSCOM in its own feedback on the Meity draft has the “government is best placed to be in a regulatory and ecosystem development capacity than in an infrastructure provision and maintenance capacity.” The government, in its view, can help establish rules for the formation of consortium networks and promote standardisation among the participants while also establishing different kinds of incentives for these participants.
NASSCOM said that the European Union, Australia, Germany and other countries have been engaging with industry and state-based stakeholders through formalised channels of associations to develop and promote the use of blockchain technology. India too should consider establishing formal channels of engagement with the industry, it said.
The Centre for Internet and Society (CIS), India, in its comments said that there is a need for a centralised, final policy. Multiple papers and policy documents on blockchain technology have been issued so far, including the Report of the Interministerial Committee on Virtual Currencies; Blockchain: The India Strategy by the Niti Aayog; Blockchain for Government Whitepaper by the National Informatics Centre.
“There should be a single National Strategy Paper which should not only acknowledge the existence of the other papers, but also clarify that as a matter of government policy, the positions stated in this paper would take precedence over the others,” CIS said.