Thursday, September 29, 2022

Infosys Co-Founder Nandan Nilekani Suggests To Use Crypto As Asset Class And Not Currency

Although cryptocurrencies are facing regulatory uncertainty in India, virtual currency has been gaining popularity among citizens, keeping that in mind, the government could consider using it as an asset in the country, says Nandan Nilekani, the co-founder of Infosys.

He further specified that like gold and silver, cryptocurrency stores value but it does not have any transactional value. 

During an interview with Financial Times, Nilekani shared his views on cryptocurrency and said, “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.”

Presently, Nilekani is serving as a chairperson of Infosys. He also has given his contribution in developing the Aadhaar biometric identity project, which is being managed by UIDAI (Unique Identification Authority of India). 

The co-founder of Infosys is not in support of using cryptocurrency as a medium of payment because of its volatile nature, but he does believe that it could be used as an asset class in the country. 

While sharing his views on cryptocurrencies, Nilekani said that if the government regulates the digital asset, it would open the ways for the Indian crypto investors and traders to put their funds into the country’s economy.

In March 2021, Nilekani held a discussion with angel investor Balaji Srinivasan and Karthik Reddy of Blume Ventures. At the time of discussion, the chairperson of Infosys 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.”

Nilekani further talked about the Central Bank Digital Currency, which the Indian government is planning to introduce in the country. However, according to him, before proceeding any further on the CBDC project, the regulators should research how it could help the citizens of India.

Nilekani’s ideas and views on cryptocurrencies have brought a ray of hope for the industry, which for the past few have been clamouring for regulation. 

While the chairman of Infosys has suggested some ways to involve the usage of cryptocurrency, the Indian Banks tried to cut off their ties with those involved in the crypto-related activities. 

A few weeks ago, the banks, while citing RBI’s 2018 circular, mailed their customers that soon their accounts will be suspended. However, it is to be noted that the decision was revoked in 2020, by the Supreme Court of India.

Later, the RBI clarified its stance on cryptocurrency and stated that the banks could not use its earlier decision to ban transaction-related cryptocurrency.

A report published last week specified that now, the crypto industry has been planning to self-regulate itself.

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