How uncertain crypto regulations can limit India’s potential to be #1
- India’s advantages in software development played a role in the growth of Web3.
- The delay in creating a regulatory framework was an area of concern.
Technology never lies still. It’s forever adapting to newer narratives and purposes.
The introduction of blockchain technology or Web3, was a crucial milestone in this continuous process of evolution. Birthed from the ideals of decentralization – a concept that challenges power concentration by a single entity, the convoluted world of blockchains and cryptos managed to capture the public imagination in a very short span of time.
Over time, the craze has spread far and wide. It would be hard to pinpoint any location on the global map which has been left untouched by this disruptive idea. The U.S. and Europe have been the power centers of crypto growth, as most media reports and analyses would point out.
However, the trends developing in other corners of the world reveal a fascinating story no less. So, what happens when the blockchain wave strikes the land of over 1.4 billion?
The emerging giant
K33 Research, a digital assets market analysis firm, recently published a report. The said report mapped the global crypto landscape from the perspective of value creation and employment.
A major takeaway was the trend developing in the Asian market. India surpassed China to emerge as the largest crypto employer, accounting for 20% of the total workforce in the world’s largest continent. China, the largest Asian economy and once the crypto trading and mining capital of the world, slipped to the second spot with a 15% market share.
India’s dominance impacted its global standings as well. With a head count of about 12,900 employees, the country grabbed the third position in terms of crypto employment, ranking behind the U.S. and the UK.
However, Indian talent was not limited to the confines of the home country. The report added that there was a sizeable number of Indians working for big crypto companies globally. India was the second most common origin country for U.S.-based companies and the fourth most common origin country in the United Kingdom.
Over the last three decades, India has emerged as a powerhouse in software development and information technology (IT) services. A mixture of a competent higher education system, a large English-speaking population, and supportive policies by successive governments, propelled the country to the forefront of software-related services.
Around 9.75 million Indian developers were active on the leading software development collaboration platform GitHub in 2022. Note that India has the second largest developer community after the U.S. When the report was released, Github had predicted that India’s developer population would match that of the U.S. by 2025.
The aforementioned report by K33 Research also touched down on this aspect. It noted that developer jobs constituted a major chunk of the Indian crypto employment market.
Nischal Shetty, founder of India’s home-grown cryptocurrency exchange WazirX, shared his sentiment on the burgeoning crypto landscape in the country. Furthermore, he attributed a big part of it to India’s demographic dividend.
“A large portion of India’s population is fairly young. This helps them take up new domains such as Web3 with ease. We’re seeing a rise in the number of Web3 startups emerging from India. Access to capital has gotten easier for these startups as people understand Web3 far better than they did a few years ago.”
At the moment, Nischal was more invested in his next startup. This was the Ethereum Virtual Machine (EVM) compatible layer-1 blockchain Shardeum. In a note to AMBCrypto, his team stated that the majority of Shardeum’s 500k-strong Discord community members were from India as well.
The ‘Polygon’ connection
Launched in 2017, the Polygon network has grown to become one of the biggest names in the Web3 space. The project has been a pioneer in introducing some of the most sophisticated enhancements. Furthermore, it meant to foster the growth of decentralized systems.
With a total value locked (TVL) of nearly $866 million, it is home to a wide array of decentralized applications (dApps). Moreover, its native token MATIC, with a market cap of over $6 billion at the time of writing, was one of the most traded crypto assets across global trading platforms.
Interestingly, the founding team was majorly comprised of Indians, including current CEO Sandeep Nailwal, Jayanti Kanani, and Anurag Arjun.
Sandeep Nailwal has talked about his humble roots as a Delhi boy before and reminisced about the tough beginning phase of his career. However, Polygon went on to become the accomplishment of his professional life.
I am the son of a poor day-to-day worker from “Jamna-Paar”, Delhi who migrated from a peasant family in search of livelihood. My early life was not easy, I spent the beginning of my career just working to pay bills, unable to pursue my real dreams of starting my own company. 4/
— Sandeep Nailwal | sandeep. polygon ? (@sandeepnailwal) May 16, 2023
Needless to say, Polygon serves as the most significant manifestation of Indian Web3 talent.
Backing from the government
The growing Web3 ecosystem has even caught the attention of the Government. The skepticism around cryptocurrencies persists. However, the establishment seemed to exhibit a comparatively favorable stance towards underlying blockchain technologies.
Finance Minister Nirmala Sitharaman also addressed the issue around CBDCs in her budget speech for 2022. She stated that the upcoming CBDCs will be based on blockchains and other technologies.
Last year, the government launched the Bharat Blockchain Network, India’s nationwide hybrid blockchain network, envisioned to create projects of national interest. The one-of-a-kind initiative is meant to enable startups across the country to experiment with use cases. Additionally, it would also help with the launch of their blockchain projects.
IDS, the project developer, planned a Web3 tech tour titled “Bharat Blockchain Yatra” that will begin in August. The six-month-long tour spread across 18 Indian states. It is expected to include boot camps, hackathons, round table discussions, and much more. The objective was to promote blockchain technology as a powerful tool capable of finding real-world solutions.
The Hashgraph Association, a non-profit organization that promotes the usage and development of Hedera [HBAR] network, will act as the headline sponsor of the project. Talking about the importance of the collaboration, Kamal Youssefi, President of The Hashgraph Association, said,
“The Hashgraph Association wishes to further encourage and develop the significant talent in India by providing future digital pioneers, enthusiasts, and entrepreneurs funding and engineering opportunities for Web3.”
Regulatory clarity is still a far-fetched dream
While things looked hunky-dory from a distance, India still lacked a regulatory framework for the usage of cryptos and blockchains. The government has delayed the discussion on a crypto bill it announced in 2o21. Furthermore, the final draft is yet to be tabled in the Indian Parliament.
Taking cognizance of the delay, the country’s apex court lambasted the government recently, according to a report by local news organization Hindustan Times. Calling the absence of clear crypto guidelines “unfortunate”, the Supreme Court asked the government to set up a specialized body at the national level to deal with cases involving cryptos.
The Indian government has expressed strong apprehensions about the threats cryptos pose to the macroeconomic health of the country. Some experts believed that if a law were to come, a blanket ban on these private digital assets won’t be a big surprise.
However, Web3 builders still remain bullish on the India story. Karan Ambwani, India’s lead of the foundation which promotes the leading decentralized crypto exchange (DEX) dYdX, said that India’s strong fundamentals would continue to power innovation and talent growth.
“Of course regulation and policy changes is something that’s important and we take notice. However the industry has shown it’s adaptive nature and resilience in the past and will continue to adapt.”