As a part of the broader Indian crypto community, all of us have our eyes on the Cryptocurrency and Regulation of Official Digital Currency Bill slated to go on floors very soon, isn’t it? Currently, regulatory uncertainty in India is proving to be a major roadblock to blockchain adoption. The overall industrial participation is certainly lacking in terms of the Blockchain projects when we see that India accounts for less than 2% of the blockchain startups globally as per a 2019 NASSCOM report on Blockchain. Of this 2%, the majority of the medium and large service providers do not hold more than 5% of the total blockchain projects in India, which is comparatively low in comparison to other countries in North America and Europe.
Despite all the chinks in armor, the blockchain future in India seems pretty vibrant as per a PwC report. With a projected contribution of $62.2 billion in 2030, blockchain technology will impact major sectors such as supply chain management($41 billion), securitization and payments($13.2 billion), and identity protection applications($5 billion), in the descending order of their impact.
Blockchain relevance in the Indian case scenario isn’t any vainglorious presumption. We need to understand that Blockchain, as a technology, wouldn’t just impact the tech or digital industry. It is being seen as a technology that will reinvent business models and synergize processes. Karan Bajwa, MD at IBM India states, “(The) Cloud platform, fused with disruptive technologies such as AI, blockchain, cognitive (intelligence), internet of things (IoT), data analytics, and security will become the backbone of businesses looking to scale up and stay relevant in the future.”
We continue to exhibit quite a knack for discussion when it comes to the sectoral possibilities for blockchain integration, the possible use-cases, and the value they would add to the existing systems. As is the case with any foundational technology, Blockchain’s value can be realized only when it will be made commercially viable and scalable.
No doubt, India faces some major structural and institutional challenges in Blockchain adoption, we do see some amendments and initiatives already underway that reiterate McKinsey’s proposition about the public sector being best positioned to soak in blockchain utilities. But there are some foremost questions we need to find answers to before we can evaluate the opportunity blockchain holds in the Indian context:
A Gartner study reports that by 2025, the business value added by blockchain will cross $176 billion, and hit $3.1 trillion by 2030. As the new tech seeps in, conventional businesses will become obsolete and those that have already administered blockchain solutions to their processes would soon require to go under a major overhaul to remain competitive and secure. As such, blockchain is currently the fastest-growing skill set demanded on job sites, with portals witnessing 2,000–6000% job growth in the sector.
Global Tech Giants such as JP Morgan, IBM, Microsoft, Intel, are already recruiting blockchain developers in huge numbers. Indian top names including Reliance Infocomm, Bajaj Electricals, Mahindra Group, Yes Bank have integrated blockchain employment in their processes. A PwC report, no wonder, asserts that 56% of the Indian businesses are inclined to make blockchain a part of their core business process in near future. Owing to the multiplicity of its benefits and uses, blockchain is expected to gradually become a part of all the major sectors such as the Fintech industry, supply chain management, healthcare, land registry, etc. Consequently, these sectors will soon be on the lookout for developers that can design blockchain platforms and applications for them. In India, the demand for Blockchain-related jobs is greater in Southern states, with Bengaluru, the IT hub, leading the demand at 36%, as per Indeed’s data.
The government is realizing the significance blockchain holds as a transformative force in businesses across sectors including cryptocurrencies and probably, a centrally administered CBCD is in the pipeline too. Ravi Shankar Prasad, former Minister of Electronics and IT, and Communication posits the same, “In the digital world, a trained workforce will become India’s biggest competitive advantage. The government is committed to working with the IT industry and Nasscom to create India Digital Talent Stack, which will propel India into a leadership position in the digital world.”
The Ministry of Electronics and IT, Government of India has initiated training programs in collaboration with NASSCOM to train professionals in Blockchain and other emerging technologies. A budget of INR 436 crore was approved by the Union government for a skill development program for the same, the funds for which will be released gradually over 3 years time. The program has been entitled the acronym PRIME which stands for Programme for Reskilling / Upskilling of IT Manpower for Employability. The government intends to train 4 lakh professionals in the latest technologies including IoT, Blockchain, and AI.
The modern SMEs and MSMEs are the backbone of the Indian economy with over 6.3 crore enterprises providing employment opportunities to more than 110 million people. Another notable point is that most of our technology startups operate on a medium to small scale. Their work on the blockchain can prove to be a game-changer. Contrary to the popular notion that the blockchain can be integrated only in big corporations, the blockchain can open new avenues of growth for SMEs by helping them optimize their business processes and develop their business models. Blockchain use cases include areas such as trade finance, supply chain finance, smart contracts, funding among others.
The global trade finance gap is expected to grow to $2.4 trillion by 2025 as per the ADB (Asian Development Bank). Studies show that Blockchain solutions, once implemented across enterprises whether big or small, can help bridge this gap by $1 trillion. In India, too, tech startups can enable MSME expansion when backed by blockchain in processes such as tracking of goods, automation of order handling invoicing, expanding customer base, crowdfunding, etc. the biggest opportunity for SMEs can come through smart contact implementation in digital records. A smart contract, such as a digital invoice, can be used as collateral to take credit which can help in lowering fees and mitigating credit risks.
Via peer-to-peer lending, blockchain could help SMEs to overcome the hurdle of lack of access to credit. As businesses go online, the demand for online identity verification and security increases. By moving processes over to the blockchain, SMEs can enjoy the benefits of transparency and security that blockchain offers to their platforms. As more use cases are embraced, blockchain-powered SMEs can scale their operations for exponential gains.
Blockchain technology, being still in its nascence, augurs well in the unsaturated Indian markets readying themselves for the big embrace. India, with the largest concentration of startups globally, breathes in a robust digital ecosystem. If initiated in the right direction, India can become a leading hub of blockchain innovations tapping global funds via the ICO route. Given its existing demographic dividend, India can register a period of sustained growth in the long term, as has been seen across many countries like Japan, China, Korea, etc in the past. A young nation led by equally young technology can open up an unprecedented magnum of opportunities in the long run. We, at WazirX, are eager for this much-anticipated collab!