India's NFT Problem Explained!

The Government of India recently proposed a bill to regulate cryptocurrencies, which is still in discussion. The highlight of the proposal was the regulatory ban on most cryptocurrencies with a few exceptions. It also puts cryptocurrencies in an asset class and does not promote their use as legal tender. However, the bill doesn't speak about any other activities on blockchain technology. Among the most prominent are NFTs.

The bill leaves room for definitions of these assets and their categories. "NFTs are a subset of cryptocurrencies, speaking in a technical sense. However, the use case of NFTs and activities related to their creation and exchange differs significantly from cryptocurrencies. Any legal definition will have to take these into account as well. The creator economy and the economic potential of NFTs is huge for the country, artists in India can benefit a lot from NFTs." said Dev Sharma, CEO and founder of Blockwiz, a global crypto marketing agency.

The authorities have previously commented that the Government intends to promote the technology behind cryptocurrencies. However, the stand on assets like cryptocurrencies, NFTs, etc has been negative so far. This is mainly due to a lack of regulations and framework which may pose risk to the country's safety, economy, and its citizens. The decentralized and anonymous nature of the technology also adds to the problem for authorities.

One of the biggest challenges for such policies is the definitions that differentiate these. NFTs are very similar to cryptocurrencies but are not confined to being digital. "Many NFTs currently being sold have physical items paired with them. In such cases, they are being used as proof of ownership. This kind of application can be extended to property, leases, vehicles, etc. Some governments are already looking into such applications of blockchain technology. If the government intends to promote the technology, NFTs should not be regulated." added Mr. Sharma of the Canadian agency.

The bill is under advisement as of now but recent actions by the government pose uncertainty over such matters. NFTs are being adopted by Indian artists like an initiation rite into the future. Creators of all kinds will certainly benefit from the technology as their economy has been growing rapidly since the last decade. NFTs can be the way to the financial and commercial growth of these artists.