As the Internet of Things (IoT), artificial intelligence (AI), genetic engineering, and other technologies continue to develop, India is on the threshold of a historically momentous era. New methods of doing business, making payments, and increasing productivity are emerging at a breakneck pace because of this accelerating pace of innovation across all sectors.
In the driver’s seat lies the crucial Blockchain technology, which is frequently confused with digital currency. In other words, we need to separate technology from its applications. Indeed, digital money is one of the early use of blockchain technology. IBM describes blockchain technology as “a shared, unchangeable ledger that supports the process of recording transactions and monitoring assets in a corporate network.” Real estate, transportation, money, and land are all examples of physical assets (intellectual property, patents, copyrights, branding).
A blockchain network may be used to record and transact the sale of virtually any asset, which greatly reduces transaction costs and eliminates the risk for all parties involved. Depending on the blockchain, the mechanism of transaction validation, and the service given by the use case, a token or currency may be exchanged as payment for the execution of a smart contract on the blockchain.
Technological advances help each sector of the economy expand and adapt to the changing global economy. Just as e-commerce has boosted the benefits of conventional trade, so will this new technology—thanks to its better transparency, security, speed, trust, accessibility, reduced cost, etc. For these reasons, prominent companies are switching from CeFi to DeFi (DeFi). DeFi’s decentralisation frees individuals and companies from third-party operations, allowing for greater freedom and personalisation. It eliminates payments to intermediaries for services made superfluous by technology.
Smart Contracts streamline DeFi operations by tying contract terms so they execute automatically when completed. Non-Fungible Tokens arose for this reason (NFT). Blockchain technology and its uses are frequently misunderstood as private or decentralised money. Cryptocurrencies are like secure, sturdy private money from the past. The 4IR will offer economic benefits, whether purchased in currency or exchanged in cryptocurrencies, tokens, or coins, just as conventional CeFi has.
Central banks throughout the globe call their new blockchain-based digital money “Central Bank Digital Currency” (CBDC). This will align DeFi’s market currency with CBDC, digital money by banks, and their purposes. The value of a cryptocurrency or token depends on its use case and the blockchain infrastructure it operates on. Refined regulation and a stable standard, such as CBDC, can make coin and token pricing more dependable.
The fourth industrial revolution, propelled by deep technology, is crossing boundaries and seizing economic possibilities. Blockchain technology is crucial to customising the current Metaverse. India must learn how to quickly and effectively integrate a blockchain and internet-based ecosystem into its economic value chain. Blockchain’s unmediated benefits include productivity, transparency, safety, and impact. Many firms will shift drastically, boosting IT use.
“Virtual” in this context is misleading and may postpone policy choices, even while the economic gain or lost growth potential is “real.” India is missing out on billions in blockchain-related investment. This is true even though the Indian IT industry helped design many of these solutions. Tokenization of global illiquid assets is a $16 Trillion commercial opportunity, while BCG anticipates a $68 Trillion tokenization potential by 2030. As this industry grows, so should jobs, wealth, GDP growth, a new money multiplier, and Indian products and services market share.
Deloitte’s research demonstrates blockchain technology and digital assets need regulation in five critical areas: data security and privacy, geography-specific legislation, industry-specific regulatory challenges, internal/external audit, and internal control and financial reporting. An open strategy that supports blockchain use and innovation would speed India’s economic and social progress. We’ll lose if we don’t capitalise on this growth.