By Tsering Namgyal
May 13, 2021
Indian crypto regulations are uncertain with the policymakers often changing their stance on crypto and blockchain, according to Jehan Chu, the founder and managing director of Hong Kong-based Kenetic Capital.
That makes India an “outlier in terms of crypto regulations”, unlike China which has a restrictive but not prohibitive policy on cryptos such as Bitcoin, he said.
Indian policy towards cryptocurrency keeps changing and that regulatory uncertainty is not helpful for crypto investors, he said.
“China’s policy towards Bitcoin is restricted but not banned,” Chu said, adding that Beijing is actively promoting blockchain through its Blockchain Service Network (BSN).
China is also creating what he called a “template and a precursor” for central bank digital currencies with the rollout of DCEP (digital currency/electronic payments), something that other central banks can refer to while building their own digital currencies.
The Chinese digital currency, however, is “not a blockchain but a digital currency that is centralized.”
BSN, which has amongst its founders China’s UnionPay, is also planning to create “UDPN” with international banks and technology companies, something of a Chinese equivalent of SWIFT for central bank digital currencies.
In terms of US regulations on cryptocurrency, Chu believes that the US regulations are “as progressive as it has ever been.”
Going forward, Chu expects “more thoughtful and comprehensive engagements” from the US regulators.
With regards to the institutionalization of the market, Chu believes the recent moves by major Wall Street banks into the crypto space “represents a golden era of cryptocurrency.”
On May 12, the founder of public blockchain EOSIO, Block.one, announced that it plans to launch a new exchange with $10 billion in funding from Nomura, Peter Theil, Founders Fund, Alan Howard Richard Li and Mike Novogratz, amongst others.
In the last cryptocurrency bull market, Block.one conducted the largest ever ICO of $4 billion for EOSIO.
While the market is becoming more institutionalized, the crypto industry is not immune to mass hysterias.
One such phenomenon is Dogecoin which has grown by more than 130% this year partly because it moves based on “social signals” and has become part of the popular culture.
Tesla chief executive Elon Musk has become “de facto spokesperson” of Dogecoin, Chu said, because he was responsible for pushing the value of Dogecoin through his frequent mentions in his tweets.
The Dogecoin fell dramatically as the hope diminished that Musk would push for Dogecoin during his appearance on the Saturday Night Life (SNL) on May 8.
Talk abounds about adding functionality such as smart contracts to Dogecoin that could make the cryptocurrency more than just a meme coin that runs on social media signals.
On May 11, Musk even tweeted a Twitter poll asking followers if they would like Tesla to accept Dogecoin payments, with more than 78 per cent having responded Yes in one day.
Besides Dogecoin, another major phenomenon in the crypto market this year is Non-Fungible Tokens (NFTs) art that exists only in digital format.
Last month, a Singapore-based investor of Indian origin shook the world by paying US$69 million for NFT by American artist Beeple at Christie’s.
“NFTs are here to stay,” he said, adding that it represents a “paradigm shift” in how the art world functions.
Image © Kenetic Capital