Kristin Boggiano is President and Co-Founder of CrossTower. Previously, she acted as the Chief Legal Officer (CLO) and Head of Governmental Affairs at AlphaPoint, Managing Director with Guggenheim Partners and Special Counsel at Schulte Roth & Zabel. She also worked at Merrill Lynch on the credit and equity derivatives desk and began her career with roles at the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC). In 2018, Boggiano started the Digital Asset Legal Alliance (DARLA), a group for in-house chief legal and compliance officers in the digital asset industry. She is also the founder of Women in Derivatives (WIND), a global non-profit with more than 8,000 members and a mission to educate and develop women leaders. Earning her law degree and M.B.A. from North-eastern University and her B.A. from Sarah Lawrence College, Boggiano is a business-focused legal executive and strategic advisor with deep expertise analyzing the rapidly evolving regulatory landscape related to decentralized finance and digital assets.
Over the next decade, blockchain-enabled digital asset technologies offer India a significant opportunity to participate in the fast-developing Web 3.0 space. Add a young, technology-savvy population with a large developer base, India stands to benefit from this emerging technology in terms of employment, revenue generation and more. Reports and studies indicate embracing and fostering these developing technologies in India could contribute an additional 1.1 trillion USD of economic growth to its GDP over the next 11 years.
Much like the early Internet, Web 3.0 is currently in a phase where despite early adopters the general mood is rife with speculation, mainly due to the lack of a regulatory framework. The Internet sector accounted for nearly 12 per cent of the US GDP in 2020. Imagine if the US had shied away from creating a regulatory framework for wider Internet adoption. If notes were to be taken from the past, it would not be a wise decision for a digital-first economy like India to shy away from a trillion-dollar growth opportunity, especially when it is uniquely positioned for it, given its large, tech-savvy, and young population. The adoption of an early regulatory framework by the government, along with supporting structures such as private/public partnerships, grants and frameworks for education, regulatory sandboxes, VC programs and incentives for foreign investment would help expedite growth.
The underlying technology of Web 3.0 i.e., blockchain and distributed ledger technology has massive use cases such as tokenisation of real assets, supply chain, entertainment, and art. This technology powers digital assets such as cryptocurrencies, stablecoins and other blockchains that are expected to dominate the future of financial ecosystem. Interestingly, major Indian crypto exchanges have been self-regulating and enabling KYC (Know Your Customer) and AML (Anti-money Laundering) policy to ensure fair practices. With an official nod for a proper cryptocurrency framework, the industry hopes to finally get in sync with the Indian economy. This will also make for a great opportunity as a post-covid economic revival that will help create more jobs, strengthen the financial system, and bolster the economy for the future.
In 2013, the global digital asset market was approximately 1.5 billion USD in market capitalisation, within a decade the market capitalisation stands at nearly 3.0 trillion USD. More Indians too have turned towards crypto as a form of investment, more so after the pandemic. Nearly 15 million Indian retail investors representing 1.8 per cent of the population have invested over 6.6 billion USD in crypto assets as of 2021 and these numbers are only expected to grow as the web 3.0 ecosystem matures over time.
By taxing crypto-asset transactions, the Indian government surely took the first step towards embracing the crypto and blockchain industries in India. This action provides the Indian government’s validity of the asset class and removes uncertainty, which we believe will be a catalyst for significant growth.
Building a cryptocurrency framework
India has the potential to become the world leader in Web 3.0 and timely regulations by the government will help expedite this growth. Further, by announcing in the union budget 2022 that any income derived from the transfer of virtual assets will be taxed at 30%, was the first step towards embracing the crypto and blockchain industries in India, we believe this is a positive move. With the right policies, India will rapidly adapt to the revolution in information technology and will improve Indian citizens’ quality of life, creating jobs, and reinvigorating the economy. The developer community in the country is not sitting on the fringes of this technology revolution either. Moreover, digital assets backed by blockchain are projects to solve real life problems and have value – has the potential to build infrastructure, whether it’s in finance, healthcare, supply chain.
The next frontier of innovation
India has the huge potential to become a global leader in blockchain technology, enabling digital assets such as crypto. If India closes the avenues for crypto, it will be cut off like Nigeria. India’s strong base of developers will also miss out on innovation, employment, and entrepreneurship opportunities. Being a digital-first country, this innovative technology needs a regulatory framework to grow, which India can provide.
What is the way forward?
By focusing on creating core pillars around R&D, STEM programmes, education, and appropriate legislation and regulation would be immensely helpful. Helping the industry through direct investment, creating a favourable environment for emerging market players, and bringing together public/private partnerships will also go a long way.
The innovative blockchain technology that digital crypto assets are based on can provide a big boost to the Indian economy. Blockchain is quietly revolutionising for financial activities such as lending, payments and distributing credit. India should embrace this new technology through better regulatory framework. With a balanced approach and imposing proper regulations can allow innovation while at the same time balancing the need for consumer protection. And with more awareness about the sector, over time, India will embrace the sector with broader lens.