Nandan Nilekani, the co-founder of Infosys, wants India to recognize cryptocurrencies as an asset class, indicating that they are gaining traction in India despite regulatory uncertainty.
“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,” he told the Financial Times in an interview.
Because of its volatility and energy-draining nature, Nilekani, the current head of software giant Infosys and the architect of India’s Aadhaar identity system, continues to oppose cryptocurrencies as a form of payment or an alternative for government currency, according to the Financial Times.
If the government legalizes cryptocurrencies, he claims, “the crypto guys will be able to deposit their money into India’s economy.”
This has been Nilekani’s position for a long time. In March, I spoke with angel investor Balaji Srinivasan and Blume Ventures’ Karthik Reddy, Nilekani said “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. But crypto has enormous capital.”
“Indian regulators are also considering a Central Bank Digital Currency or CBDC. I am not sure if we need a private stable coin or if a digital rupee will be good enough. We need 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,” he added in that conversation.
Nilekani’s support for cryptocurrencies might be beneficial to the industry, which has been clamoring for regulation in recent months as bitcoin investment activity has reached record highs.
Banks, on the other hand, have not backed cryptocurrencies and have notified some consumers that their accounts would be suspended in the coming weeks. They were following the Reserve Bank of India’s 2018 rule prohibiting cryptocurrencies, which was recently overturned by the Supreme Court.
The RBI then emphasized that the order cannot be used by banks to stop enabling bitcoin transactions.
In the meanwhile, while the industry waits for regulation, crypto players said last week that they will self-regulate, with the Internet and Mobile Association forming a formal board to assess issues, apply best practices, and get as near to formal regulation as feasible.