Nandan Nilekani: Crypto can bring about financial inclusion

File image of Nandan Nilekani (Source: PTI)

Amid uncertainty over the fate of cryptocurrencies in India, Infosys Chairman Nandan Nilekani on December 1 said crypto assets could be used to bring about more financial inclusion.

"There is a role for crypto as assets but they obviously will have to follow all the laws and make sure that it doesn't become a backdoor for money laundering... they have to use that [as] an entry point to get lot of young people into financial markets," Nilekani, who co-founded Infosys, said at the Reuters Next Conference.

Nilekani's views assume significance as the tech tzar has been advising successive governments on tech-related policies. He is regarded as the architect of Aadhaar and served as UIDAI chairman in 2009. In July this year, he was included in a panel to advise the Centre on e-commerce.

His remarks on crypto assets come a day after Finance Minister Nirmala Sitharaman presented a glimmer of hope to the crypto industry as she told the Parliament that the government would introduce a new Bill on cryptocurrencies after approval from the Union Cabinet.

Sitharaman's statement suggested that the Centre may replace the erstwhile Bill draft, which reportedly proposed to "prohibit all private cryptocurrencies in India” barring certain exceptions to promote the underlying technology and its uses.

However, Moneycontrol earlier reported that there is a difference in the naming of the 2019 and 2021 bills. While the earlier bill’s name suggested a blanket ban--The ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’, the current bill is named ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’

Industry leaders, who found a silver lining in the finance minister's statement in the Parliament on November 30, hope the government would take a "positive direction" on the use of cryptocurrencies.

"The previous draft of the Bill was very harsh on cryptocurrencies. So definitely it can only get better now. Since the government is taking time to do research on technology and regulation, it looks like it is going in a positive direction," Sathvik Vishwanath, CEO and Co-founder of Unocoin, said.

Sharan Nair, Chief Business Officer at CoinSwitch Kuber said, "This is a positive sign. If they planned to ban it there would have been no question of reworking the Bill, they would have just gone ahead and done it. But this looks like they are putting more thought into it and finding more nuances."