Indian Web3 experts and industry insiders believe that blockchain and cryptocurrencies emerged because they are needed to adjust the existing financial system and benefit the global fintech system. Cryptocurrency experts echoed this sentiment as they celebrate World FinTech Day on August 1 every year. This day marks the death anniversary of Cosimo de’ Medici, the 15th-century Italian statesman and banker who founded the Medici Bank and influenced today’s banking system.
Experts believe speed of adoption is a key metric for countries hoping to lead the industry.
“The dynamic landscape of digital assets requires adaptability. Dhruvil Shah, senior vice president of technology at Liminal, told Gadgets 360. Digital assets have become very important, bridging the gap between Web2 and Web3. Shah further claimed that digital assets add to the financial ecosystem transparency and promote financial inclusion. “As technology advances, digital assets will further shape a decentralized and equitable global economy,” he added.
Web3 limitations and possible solutions
Global Blockchain Applications in Banking and Financial Services Market It is said From USD 1.89 billion (approximately Rs. 15,552 crore) in 2022 to USD 3.07 billion (approximately Rs. 25,262 crore) in 2023, a compound annual growth rate (CAGR) of 62.1%.
Currently, the lack of specific laws to regulate the new fintech offshoot of Web3 and cryptocurrencies has countries like India taking a skeptical approach before integrating them closely with existing financial systems.
However, industry insiders are urging online payment companies such as Google Pay and Paytm to formulate policies that will help them integrate Web3 services to their users.
“Traditional wallets deal with regulated fiat currencies, while digital assets lack comprehensive regulation. To solve this problem, cooperation within the existing regulatory framework is crucial. One possible solution is to develop hybrid platforms that implement traditional wallets and digital wallets, thus extending its services to a wider user base,” Liminal officials further noted.
Liminal is a digital wallet company based in India.The startup has hosted six rounds funds As of February 2023, it has successfully raised a whopping $31 million (approximately Rs. 255 crore) from more than 12 investors. The company is one of about 450 Web3 startups that have emerged in India in recent years.
Despite India’s tough stance on phasing into cryptocurrencies and digital assets, the country’s tech talent has managed to attract interest from venture capitalists as well as industry players seeking a blockchain workforce.
As of April 2022, Web3 financing in India has reached a peak of US$1.3 billion (approximately Rs. 11,525 crore).At that time, a Report by members of the National Academy of Sciences Zeng said that 11% of the world’s Web3 talent resides in India, making the country the third largest home for the Web3 workforce. The report predicts that India’s 75,000 blockchain professionals will grow by 120% by 2024.
Industry insiders’ predictions on the Web3 roadmap
Purushottam Anand, advocate and founder of Crypto Legal, pointed out in an interview with Gadgets 360 that internationally, the fintech industry has incorporated Web3 elements.
“The global consensus on the regulation of digital assets appears to overwhelmingly favor regulation rather than outright bans. With the exception of China, no major economy has banned digital assets, while Europe, the Financial Action Task Force and the World Economic Forum (WEF), Many international groups or organizations such as the International Monetary Fund and countries such as India, Japan, Singapore, the United Arab Emirates, and Hong Kong have finalized or released some draft digital asset framework regulations. I believe that by 2025, most countries will have formulated some forms of digital asset regulation.”
If not cryptocurrencies, countries around the world are now looking into their own central bank digital currencies (CBDC). Created on the blockchain, a CBDC is a digital representation of fiat currency that eliminates the need for physical paper notes, while also recording the details of all transactions in an immutable format on the blockchain.
Nischal Shetty, CEO of WazirX cryptocurrency exchange, told Gadgets 360 that CBDC trials are disrupting the fintech landscape, especially for existing UPI players in India.
“As transactions are settled in real-time directly through the central bank’s digital currency infrastructure, the need for intermediaries such as payment gateways is likely to reduce, thereby saving costs and streamlining processes for UPI participants. Scalable blockchain with high throughput capabilities , can facilitate instant transaction confirmation, making it ideally suited to support seamless and fast settlement of CBDC transactions,” Shetty said.
Currently, around $100 million (approximately Rs. 826 crore) of CBDC is being circulated in different regions around the world where governments are conducting trials. According to a recent study, this number is expected to reach $213 billion (approximately Rs. 1,760,880 million) by 2030, with an expected growth rate of 260,000% juniper research corp. once said.
Meanwhile, banking giants such as JPMorgan Chase, Goldman Sachs and Mastercard are already testing Web3 with select cryptocurrency and digital asset-related products.
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