The Indian government’s
reported plan to ban all cryptocurrencies has drawn sharp reactions from members of the crypto community, who say banning cryptocurrencies while simultaneously encouraging the use of blockchain technology, on which these virtual currencies are built, would be like permitting the use of electric vehicles but not funding them.
But Swaminathan said, “Cryptocurrency is a use case for blockchain technology. While cryptocurrency cannot exist without blockchain, the reverse does not apply.” Other uses for blockchain technology include improving companies’ resiliency, efficiency and security, and helping them track the development of products in their supply chains, he added.
Swaminathan said blockchain technology can help Asian countries build their innovation muscle “much faster”, and that these countries are at an advantage compared to Western nations as the vast majority of tech talent is in Asia. “Blockchain can bring technologists together to work even in a more effective way,” he said.
However, those in the crypto community believe that cryptocurrencies are necessary to truly reap the benefits of blockchain technology for one simple reason: they would fund the growth of innovative companies in the sector.
Mathew Chacko, partner at law firm Spice Route Legal,
had earlier told ET that blockchain innovation, which has a role to play in governance, data economy and energy, would come to a grinding halt in India if cryptocurrency was banned. “An innovative way to take advantage of blockchain technology is to use crypto assets to finance the growth of a blockchain company. If you ban cryptocurrencies, it’s like you are permitting electric vehicles but not funding them,” Chacko said.