India

Reserve Bank of India to reportedly launch digital rupee pilot in November

Now debuting a wholesale CBDC, the RBI plans to launch the digital rupee for the retail segment within a month in select locations.

The Reserve Bank of India (RBI) is on track to debut a central bank digital currency (CBDC) after announcing its digital rupee project in February.

The central bank of India will launch the digital rupee pilot for the wholesale segment on Nov. 1, the RBI announced on Oct. 31.

The pilot will involve nine locally operating banks, including the biggest Indian bank, the State Bank of India. According to a report by Reuters, other banks in the pilot will also include Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC.

The main use case of India’s CBDC pilot will be to settle secondary market transactions in government securities. The digital rupee is expected to add more efficiency to the interbank market by reducing transaction costs of settlements, the RBI said.

Wholesale CBDCs are a type of CBDC primarily used by financial institutions like banks, involving interbank transactions such as securities settlement and cross-currency payments.

Unlike wholesale CBDCs, retail CBDCs are utilized by households and businesses, allowing them to make payments directly and store value via the digital version of a specific fiat currency, like the Indian rupee. According to the new report, the RBI plans to launch the digital rupee for the retail segment within a month in select locations.

India has been somewhat quick in launching a CBDC. Indian Finance Minister Nirmala Sitharaman announced the initial plans in February 2022, declaring that a digital rupee would be a “big boost” for India’s economy. The RBI then proposed a three-step graded approach for its rollout, aiming for little or no disruption to the traditional financial system.

While rushing the CBDC’s development, the Indian government has been taking measures to make crypto less attractive for local investors, including adopting a 30% tax on digital asset holdings and transfers in April. As previously reported by Cointelegraph, the new crypto taxes had a negative impact on the country’s crypto ecosystem, forcing industry entrepreneurs to move to friendlier jurisdictions.

Web3 to inject $1.1T in India’s GDP by 2032, following 37x growth since 2020

The explosive Web3 growth in the country is supported by several factors, including a large talent pool, a high adoption rate and product development for global markets.

The global Web3 boom is expected to add $1.1 trillion to the Indian economy over the next decade, supporting the investment-based momentum driven by over 450 in-house startups, including CoinDCX, Polygon and CoinSwitch.

A recent study from the National Association of Software and Service Companies (NASSCOM), an Indian non-governmental trade association and advocacy group, highlighted India’s position as a leading global player in the Web3 market owing to several factors spanning a large talent pool, high adoption rate and product development for international markets.

*Snapshot of India’s Web3 startup ecosystem in 2022. Source: NASSCOM*

The US-India Strategic Partnership Forum (USISPF) estimated that “Web3 can add $1.1 trillion of new economic value to the Indian GDP in the next 10 years.”

*Investments in Indian Web3 startups. Source: USISPF and NASSCOM*

Moreover, the study highlighted that investments in Indian Web3 startups mimicked crypto adoption by racking up a 37x growth over the last two years. The explosive Web3 growth in the country is further supported by an increasing talent pool, which makes India’s demand-supply gap the lowest when compared to the USA, China and UK.

In addition, India ranks first when it comes to reskilling in newer technologies, which is considered paramount in emerging technologies such as Web3 and blockchain.

*Global Web3 talent distribution. Source: OKX and NASSCOM*

The above graphic shows the global talent pool for Web3, showcasing the US and China overpowering India. However, the study estimates that India’s Web3 talent pool is expected to experience the fastest growth rate in the coming 1-2 years.

*Focus areas for Indian Web3 startups. Source: Zinnov CoNXT Research & Analysis*

The Indian Web3 ecosystem caters to a variety of real-world applications and roughly 60% of the local startups expanded their footprint outside India.

Indian e-commerce giant Flipkart recently launched a metaverse space — named Flipverse — for locals to try out and purchase merchandise from brands including Puma and Nivea.

Flipverse was developed in collaboration with Polygon-incubated organization eDAO and will support digital collectibles and be made available on Flipkart’s newly online shopping platform, FireDrops.

Web3 to inject $1.1T in India’s GDP by 2032, following 37x growth since 2020

The explosive Web3 growth in the country is supported by several factors, including a large talent pool, a high adoption rate and product development for global markets.

The US-India Strategic Partnership Forum (USISPF) estimated that “Web3 can add $1.1 trillion of new economic value to the Indian GDP in the next 10 years.”

In addition, India ranks first when it comes to reskilling in newer technologies, which is considered paramount in emerging technologies such as Web3 and blockchain.

The above graphic shows the global talent pool for Web3, showcasing the U.S. and China overpowering India. However, the study estimates that India’s Web3 talent pool is expected to experience the fastest growth rate in the coming 1-2 years.

The Indian Web3 ecosystem caters to a variety of real-world applications and roughly 60% of the local startups expanded their footprint outside India.

Indian e-commerce giant Flipkart recently launched a metaverse space — named Flipverse — for locals to try out and purchase merchandise from brands including Puma and Nivea.

Shoppers in India can now order sneakers in the Metaverse for a week

Indian e-commerce giant Flipkart partnered with Polygon-incubated organization eDAO to launch a virtual shopping world in the Metaverse.

Consumers in India are getting more options for a digital shopping experience as major local e-commerce platforms increasingly experiment with blockchain and the Metaverse.

Indian shoppers can try out products from brands like Puma and Nivea in the gamified and interactive metaverse. That is thanks to local e-commerce giant Flipkart launching a metaverse space for consumers to discover products in a photorealistic virtual destination and shop.

Flipkart officially announced the launch of Flipverse on Oct. 17, aiming to bridge the best of the online and offline shopping experience.

Developed in collaboration with Polygon-incubated organization eDAO, Flipverse allows shoppers to create a metaverse avatar to go shopping in a virtual world, intending to bring customers closer to their favorite brands. At the same time, brands will be able to generate and create their metaverse-ready digital twin in the virtual world.

Besides featuring contests and exclusive brand offers, Flipverse will support unique digital collectibles. According to the announcement, Flipverse will feature a wide number of brands, including Puma, Noise, Nivea, Lavie, Tokyo Talkies, Campus and others. The new shopping experience will be available on Flipkart’s newly online shopping platform, FireDrops.

The Flipverse offering is reportedly in the pilot stage and aims to attract interest during this month’s festive season. Flipverse’s first phase pilot will be live for a week, Flipkart noted in the announcement.

According to Naren Ravula, vice president of product strategy of Flipkart Labs, the Metaverse is one of the “significant revolutions” in the development of e-commerce, and it has immense potential. “By providing customers with access to their preferred brands, offers, SuperCoins, and digital collectibles, we are aiming to improve their shopping experiences in a virtual and immersive setting,” Ravula noted.

Polygon co-founder Sandeep Nailwal pointed out that the world has only “just begun to scratch the surface of what’s possible in the metaverse,” and e-commerce is one of the “killer use cases” of the Metaverse.

As one of the largest e-commerce platforms in India, Flipkart is known for making some loud cryptic statements on social media. Last year, Flipkart took to Twitter to say that the company would be accepting Bitcoin (BTC) payments, which eventually turned out to be an April Fools’ Day prank.

Flipkart is not the only company in India to experiment with the Metaverse. Indian multinational technology firm Tech Mahindra announced the launch of TechMVerse in February 2022, planning to offer interactive and immersive experiences to customers. As of July 2022, the firm was reportedly working on as many as 60 metaverse projects.

India ranks third in the world in terms of Web3 workforce size: Report

There are currently 450 Web3 startup in the country, including four unicorns.

According to a new study published by the National Association of Software and Services Companies (NASSCOM), a nonprofit organization in India with over 3,000 members, the country currently possesses 11% of the world’s Web3 talent. The figure makes India the world’s third-largest regarding its Web3 workforce, employing nearly 75,000 blockchain professionals today. Furthermore, the industry group expects the talent pool to grow by over 120% within the next two years.

India is also home to 450 Web3 startups , four of which are unicorn companies. Through April 2022, the Indian Web3 ecosystem has raised $1.3 billion in funding. Moreover, over 60% of Indian Web3 startups have expanded their footprints outside of the country.

The vast majority of firms listed in the study are building applications in decentralized finance, gaming nonfungible token (NFT) marketplaces, metaverses, decentralized communities, on-chain coordination mechanisms and so on.

Within the next few years, NASSCOM remains optimistic about Web3’s growth outlook in the country, stating that it expects the number of Indian internet users to increase by 150 million and 5G users in India to increase to 500 million. Debjani Ghosh, president of the NASSCOM, commented:

“India’s rapid adoption of new-age technologies, its growing startup ecosystem, and large-scale digitally skilled talent potential is cementing the country’s position in the global Web3 landscape. It is heartening to see that industry and government stakeholders in India are taking a very pragmatic approach toward blockchain tech, with use cases being explored in areas ranging from health and safety, finance, enterprise tech and land registry to education.”

Interpol reportedly creates dedicated unit to fight crypto crimes

Law enforcement agencies are “very often” not properly trained or equipped to track crypto crimes, Interpol secretary general Jürgen Stock said.

The International Criminal Police Organization is reportedly planning to strengthen its crackdown on cryptocurrency-related crimes by forming a dedicated division.

Interpol, the world’s largest global police organization, has set up a special team in Singapore to help governments fight crimes involving virtual assets, the Indian news agency Business Standard reported on Oct. 17.

Interpol made the announcement at a press conference ahead of its 90th general assembly in Delhi, which is to be attended by high-profile police officials from its 195 members from Oct. 18 until Oct. 21.

According to Interpol secretary general Jürgen Stock, the absence of a legal framework for cryptocurrencies like Bitcoin (BTC) and Ether (ETH) poses major challenges to law enforcement agencies. “Because very often, agencies are not properly trained and properly equipped” to address cryptocurrency crimes in the beginning, Stock reportedly noted.

Stock also pointed out that cryptocurrency and cybercrime will be the main focus of the agenda at Interpol’s general assembly in India.

#Crypto currencies are emerging as major threat across the globe: Jurgen Stock, Interpol chief

The Interpol global complex for innovation in Singapore is working on a mechanism to deal with challenges emerging from #Cryptocurency

— Sachin Singh (@sachinsingh1010) October 18, 2022

Praveen Sinha, the special director of India’s Central Bureau of Investigations, reiterated that it has been increasingly difficult to monitor cybercrime. He also highlighted Interpol’s role in establishing and developing better police cooperation at the global level.

“The only answer is international cooperation, coordination, trust, and real-time sharing of information,” Sinha said.

The news comes soon after Interpol issued a “red notice” to global law enforcement in September for the arrest of Terraform Labs co-founder Do Kwon. South Korean prosecutors in Seoul previously asked Interpol to circulate the “red notice” for Do Kwon across the agency’s 195 member nations to find him following the collapse of the Terra ecosystem in May 2022.

Interpol’s latest efforts to better track cryptocurrency crimes are not the agency’s first initiative to get more crypto-related skills. Interpol has been working to get more expertise to learn about cryptocurrency transactions and identify criminal activity in the darknet as early as at least 2015.

In 2020, Interpol partnered with the cybersecurity firm Trend Micro to reduce cryptojacking affecting routers across South-East Asia. The agency also worked with the South Korean data intelligence startup, S2W Lab, to analyze dark web activity, including cryptocurrency transactions in March 2020.

India aims to develop crypto SOPs during G20 presidency, says finance minister

Sitharaman has previously called for global collaboration to decide on crypto’s future and has been cautious against mainstream crypto adoption citing risks to financial stability.

The finance minister of India, Nirmala Sitharaman, revealed India’s plan to develop standard operating procedures (SOPs) for cryptocurrencies during its G20 presidency, from Dec. 1, 2022, to Nov. 30, 2023.

Sitharaman has previously called for global collaboration to decide on crypto’s future and has been cautious against mainstream crypto adoption citing risks to financial stability. However, speaking to local Indian reporters on Oct. 15, she confirmed, “That (crypto) will also be part of India’s thing (agenda during G20 presidency).”

The G20, or Group of Twenty, is a global forum for addressing the major issues related to the global economy. According to Sitharaman, no country can alone effectively handle or regulate crypto, adding that:

“But if it’s a question of platforms, trading of assets which have been created, buying and selling making profits and, more importantly in all, these countries are in a position to understand the money trade, are we in a position to establish for what purpose it’s being used?”

Sitharaman further highlighted the use of crypto assets in money laundering as detected by India’s law enforcement agency, Enforcement Directorate.

She further added that members of the G20 have also acknowledged the same concerns while reiterating the need for the participation of all countries when it comes to effectively regulating crypto assets.

On Oct. 7, the Reserve Bank of India released a list of proposed features and reasoning behind its in-development central bank digital currency (CBDC).

The 51-page document summarizes key motivations for the issuance of the digital rupee, which include trust, safety, liquidity, settlement finality and integrity. Some of the biggest motivations for India’s digital currency are reduced operational costs and improved financial inclusion.

India aims to develop crypto SOPs during G20 presidency — Finance minister

Sitharaman has previously called for global collaboration to decide on crypto’s future and has been cautious against mainstream crypto adoption citing risks to financial stability.

Sitharaman has previously called for global collaboration to decide on crypto’s future and has been cautious against mainstream crypto adoption, citing risks to financial stability. However, speaking to local Indian reporters on Oct. 15, she confirmed, “That (crypto) will also be part of India’s thing (agenda during G20 presidency).”

“But if it’s a question of platforms, trading of assets which have been created, buying and selling making profits and, more importantly in all, these countries are in a position to understand the money trade, are we in a position to establish for what purpose it’s being used?”

Sitharaman further highlighted the use of crypto assets in money laundering as detected by India’s law enforcement agency, Enforcement Directorate.

On Oct. 7, the Reserve Bank of India released a list of proposed features and reasoning behind its in-development central bank digital currency (CBDC).

Polygon powers India police complaint portal, battling corruption

The First Information Report (FIR) launched on Polygon allows the citizens of Firozabad to register complaints against the police without worry of it being dismissed or manipulated.

The 2.8 million citizens of India’s Firozabad district may now be able to sleep a little tighter after the launch of a new police complaint portal that uses blockchain technology to prevent manipulation.

On Oct. 12, Polygon co-founder Sandeep Nailwal announced in a series of tweets that the Polygon blockchain protocolo is now being used by Firozabad police in Uttar Pradesh to fight against local police corruption and crime.

Called the First Information Report (FIR), the portal allows victims of crimes to register complaints against local police officers without the complaints either being dismissed or manipulated by potentially corrupt officers.

Nailwal shared that the project was very close to his heart because he grew up hearing stories of victims not getting justice due to local police corruption, many of who were victims of rape.

Police Complaints(FIR) on blockchain powered by @0xPolygon

This is very close to my heart. We grow up hearing about so many of such cases wherein due to some corruption in a local police department, victims(mostly of rapes) are not even able to register complaint or…1/2 https://t.co/k9gRMD6r08

— Sandeep | Polygon 3️⃣ (@sandeepnailwal) October 12, 2022

The video shared by Nailwal was posted by the Firozabad police, featuring a snippet from the senior superintendent of Firozabad police, Ashish Tiwari.

Nailwal said the FIR going on the blockchain ensures that the reports can not be manipulated or denied by lower-level officers and “could be a game-changer in ensuring right to justice.”

In the announcement, Nailwal also thanked the police commissioner for going beyond the call of duty to implement and innovate with technology to ensure equitable justice.

The announcement from the Firozabad police has also been picked up by others in the crypto community, with many seeing it as great news for Polygon, blockchain technology and the citizens of Firozabad.

Twitter user srinigoes, a veteran of the Indian navy, commented to their 15,200 followers it was “an amazing initiative” to get complaints registered on the blockchain, which would ensure transparency.

“The biggest problem in the interiors of India was whoever registered the FIR (First Information Report) first, had first mover advantage,” he said.

1/2
This is an amazing initiative. To get the complaints registered on blockchain. At least the blockchain will ensure transparency. The biggest problem in the interiors of India was whoever registered the FIR (First Information Report) first, had first mover advantage. https://t.co/vMbEWRG4Rr

— Srini ~ Akash the Ape (@srinigoes) October 12, 2022

Kashif Raza, founder of crypto education startup Bitinning, noted on Twitter that the first complaint portal on Polygon has now been launched, meaning:

“1) Complaints are now immutable. 2) Verifiable. 3) Easy to file.”

On Oct 6, Cointelegraph reported that Polygon announced a partnership with the Ocean Conservation Exploration and Education Foundation (OCEEF) to promote ocean literacy through new creative, entertaining and engaging ways to give people exposure to deep underwater missions.

India’s central bank outlines digital rupee CBDC plans

India’s Reserve Bank outlined the pros and cons of a digital rupee as it looks to raise awareness around its CBDC project.

The Reserve Bank of India (RBI) has outlined the proposed features and reasoning behind its in-development central bank digital currency (CBDC) in a 51-page note published on Oct. 7.

The country’s central bank is looking to raise awareness of CBDCs, which are being developed by a number of central banks around the world, and to clearly define the objectives and choices as well as the potential positive and negative elements of introducing a digital rupee in India.

The document summarizes the key motivations for the issuance of an Indian CBDC, highlighting trust, safety, liquidity as well as settlement finality and integrity as key components of a sovereign digital currency.

A primary motivator for issuing a CBDC in India is to reduce the operational costs involved in managing physical cash in the country. The RBI also touts improved financial inclusion in addition to an increasingly resilient, efficient and innovative payments system.

Improved cross-border payments and settlements are also underlined through the promise of an offline feature for the CBDC, which would be beneficial in remote locations and in areas without a stable electricity supply or mobile network access.

The RBI has long held public blockchains and cryptocurrencies at arm’s length, with the document outlining its continued view that cryptocurrencies pose a significant risk to Indian consumers due to market volatility.

“These digital assets undermine India’s financial and macroeconomic stability because of their negative consequences for the financial sector.”

The RBI also highlighted its concern that the continued proliferation of cryptocurrencies would diminish its ability to regulate monetary policy and the monetary system, which the central bank holds to b a threat to financial stability in India.

A digital rupee CBDC is being touted to have the same benefits as public cryptocurrencies while “ensuring consumer protection” by avoiding what it described as “damaging social and economic consequences.”

The note goes on to outline the differences between a retail and wholesale CBDC, with the former serving the public sector while the latter would have restricted access catered toward financial institutions. The RBI hinted that there might be merit in introducing both forms into the Indian marketplace.

The Indian central bank also touched on the possibility of direct and indirect issuance and management. Direct issuance would see the RBI responsible for managing the entire system, while the indirect model would involve the use of intermediaries like banks and other payment service providers.

The RBI also noted that a token-based CBDC would be preferred for retail use given its similarities in use to physical cash. Account-based CBDC issuance would be considered for wholesale users.

The document also considered the potential infrastructure underpinning the digital rupee, highlighting conventional, centrally controlled databases or distributed ledger (blockchain) technology as the two options on the table:

“While crystallising the design choices in the initial stages, the technological considerations may be kept flexible and open-ended in order to incorporate the changing needs based on the evolution of the technological aspects of CBDCs.”

The note also touches on the role of physical currency in providing anonymity, universality and finality. Given that digital transactions would leave a trail, the degree of anonymity provided is still being assessed while the RBI suggested that reasonable anonymity for small-value transactions like physical cash may be a “desirable option” for a retail CBDC.

The ongoing development of a digital rupee will likely involve further stakeholder engagement and iterative design to produce a CBDC that suits a broad range of use cases. The Indian central bank also stressed its intent for the CBDC to complement current forms of money and provide additional digital payment avenues to users.