Dealing with a troublesome child:
“A consultative and enabling regulatory approach towards Blockchain can help drive the growth of the Blockchain ecosystem and innovation in India.”
India will soon debate the proposed draft to make cryptocurrency dealings illegal in India. The outcome appears certain. But only recently the association of software companies, Nasscom has released its India Blockchain Report for 2019.
At the global level, over 50 countries are trying to make blockchain part of their economy. They are aiming at creating a blockchain ecosystem. Last year was the ‘watershed’ period for ICOs and investment, touching over $20 billion. (As per ICOData.io, there were over 1,200 ICOs last year, which raised around $7 billion)
This year Blockchain 3.0 is in focus, which makes it faster (10K transactions per second compared to VISA’s 24K), more user friendly and with business value. There is a shift from experimenting to creating real business use cases. This is called proof of value.
In India’s government arena, half of the states have blockchain projects at various stages of implementation (see details below). In private sector, BSFI/Manufacturing is most active, with over 50–60% adoption. Other industries are retail, healthcare and logistics.
Global Blockchain Scene
Europe is leading as the geography where over 50% blockchain related projects are based.
Forty countries are positive towards crypto, and have made license requirements for cryptocurrency dealings, exchanges and ICO and projects. There are 26 countries where a startup can test its projects with real customers in a regulatory sandbox environment without the hassles of regulations.
With 2% of global start-ups, where is the Indian ICO focus?
BFSI is where the most action is, with startups offering payment solutions, wallets, P2P lending, and exchanges (now stuck due to ban on bank participation). The top areas are high tech, banking and infrastructure. Retail has only 2% of ICO focus, exceeded by gambling at 3%. The VC money is distributed across exchanges, payment and enterprise blockchain ventures.
India’s share of the global investment was $8.5 million, about 0.2 percent of the total global figure. The main reason for the low figure is regulatory uncertainty. This has made Indian startups operate from places such as Malta, Singapore, Switzerland or the UK.
Some of the significant Indian funding ventures: Signzy, Unocoin, Elemential Labs, Zebpay, Diro Labs and Nuo Banks.
State of Blockchain Projects
What’s happening inside Indian blockchain projects? As per the report, around 70% of blockchain projects are at an experimental, proof of concept stage. Some of these are moonshot ventures, or use case developments. Around 24% are at the pilot stage, partly implemented, under test and observation. Only 6% of blockchain projects are at production stage.
Expectations in 2019
What is expected from Indian blockchain projects this year? As per the report, blockchain has proved its potential value, and now enterprise adopters want to see cost reduction and efficiency benefits. These will apply to over 70% of the projects.
Blockchain skills and talent
Is there a shortage of blockchain talent in India? The report identifies 45,000–60,000 skilled resources at the industry level. The lacuna is sharp in mid to senior levels for pilots, proof of concept and solutions. There is collaboration for certifications with blockchain players like Ripple, R3 Corda and Hyperledger. Another approach is via public sector collaboration, for instance Tech Mahindra is part of Telangana’s Blockchain District venture, India’s first blockchain district.
Public/government sector blockchain projects
How many public blockchain projects are currently in development in India? The majority of these projects, 40+ in number, started in 2018, and only 8% are live. Land registry, farm insurance and digital certificates are the top use cases for government. The report cites a number of areas such as health records, power distribution, agriculture supply chains, identity, rationing, etc.
Which Indian states are adopting blockchain? What are the projects?
· Andhra Pradesh is collaborating with Zebi Data for land registry
· UP has partnered with UNDP for land titles
· Telangana is building a state level blockchain with C-DAC, IIIT and Tech Mahindra
· West Bengal has partnered with Holland based Lynked.World
· In 2016, Gujarat partnered with Zebpay
· Maharashtra has an MoU with Switzerland for sharing ideas
· Assam is in partnership with Nucleus Vision for citizen records
· Rajasthan is in partnership with Mumbai based Auxesis group for land and health records
How long have Indian industries worked with blockchain?
Not for very long. Banking, manufacturing and financial services have been exploring blockchain for the last 3 years (2016). Retail, insurance, utilities and government have been active since 1–2 years (2017), and for the last one year, other industries have caught up: travel, media, healthcare, life sciences and telecom.
“A blockchain working group (similar to the Dutch Blockchain Coalition) or a self-regulatory body (similar to the one in Japan) can help drive the development of regulations or standards required for the growth of the overall ecosystem in India.”
Investment in IP, talent and expanding use cases: “IBM and Accenture together have filed 50+ patents in US, which is more than the blockchain-related patents of all Indian service providers put together.”
Access the entire Nasscom India Blockchain Report 2019