Cryptocurrency ban may have collateral impact on Indian blockchain firms

The news of the ban on cryptocurrencies in India has become an issue for the entire blockchain world. While crypto exchanges and wallets are obviously concerned, industry stakeholders said a ban could affect non-crypto companies too — those who use the blockchain infrastructure to build decentralized applications (DAPPS). For some, this means delays in raising funds, while others are already considering winding up their India business and setting up shop elsewhere.

What investors have to say?

Stakeholders said that it’s unclear whether building public blockchain-based products will still be feasible if a ban occurs. A public blockchain isn’t managed by any central entity and is instead run by the public. “A blockchain by definition is a decentralized network, and a token is an integral part of any blockchain project. A blanket ban on cryptocurrencies leads one to believe that all types of crypto assets will be banned,” said Ganesh Swami, chief executive officer of Covalent, a blockchain-based analytics company.

Also read: FM’s views on crypto norms in India

Tokens, in this case, are similar to cryptocurrencies like Bitcoin and Ether. However, while Bitcoin and Ether are meant to be traded or for making purchases, other tokens, often called utility tokens are used to provide the public incentive to support a project. Public blockchain projects need computing power, and in the absence of a central body, this power comes from the public who provide the same in exchange for tokens. Decentralized finance apps are an example of such products. Non-fungible tokens (NFTs) used for selling digital art are another example.

bitcoin

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: