Indian Blockchain Community Doubtful of Crypto-backed Loans, Points Fingers at Regulation
Indian Industry Companies Doubtful of Crypto-backed Loans, Points Fingers at Regulation!
With several improvements that rose from the use of diverse technologies like machine learning, artificial intelligence, Know-Your-Customer (KYC) keys and Application Program Interfaces (APIs), especially with respect to the digital assets world, one would assume that using cryptocurrencies as a collateral for loans would be ideal. This, unfortunately, is not the case.
A recent survey conducted by News.Bitcoin.com covered responses from Indian innovators and individuals who work within the respective field. The notion of “digitizing loans”, as the news outlet put it, does not seem to set well with most of the individuals surveyed and its mainly because of the lack of sound regulation.
Abhi Upadhyay was quoted saying the following,
“Banks are never going to come close to accept cryptocurrency as security.”
Banks are known for being traditional and in all cases, centralized, which were the two main reasons why many have started rival projects in the form of blockchain, with many successful ones to date. Doesn’t success imply adoption? The main concern that those surveyed expressed is the obvious: regulation.
Founder and CEO of Rubique, Manav Jeet considers cryptocurrency-backed loans as a possibility, however, at the same time he does not see it as being a simple and instant transformation. His reasoning is that Indian markets are the “best regulated markets” and with the regulations in place only a “tiny portion of Indian population is using cryptocurrencies”. This alone was enough for him to conclude that it will take some time, especially for India, to accept such an idea.
Paysense’s Head of Marketing, Saurabh Shankar, who is optimistic about a possible crypto collateral, deems “the current regulatory environment” as a hindrance, noting that a “crypto-to-fiat [lending] would be a whole new space to reckon”.
Finally, LendingKart’s VP Finance, Piyush Kabra, points his fingers at the country’s regulation as being the reason why crypto-backed loans will never be a reality. This only goes to show that interest is present and could potentially become reality, however, executing it within society will only be possible given that the country provides clear, fair and friendly regulation on the said matters.
What are your thoughts on these findings? Will crypto regulation help India break-free from the invisible barrier placed in its financial practices? Let us know in the comments below.