‘Blockchain can help in financial inclusion’

The journey of cryptocurrencies and blockchain technology dates back to 2008 when Satoshi Nakamoto published his white paper on the bitcoin. Nine years later, the world is still trying to make sense of this technology. Governments in Japan and China have taken the lead while India is close to deciding the way forward for bitcoins. With this as the backdrop, Mint spoke to David Lee Kuo Chuen, economics professor of fintech, Singapore University of Social Sciences, about China and Japan’s regulatory stance on bitcoins and where blockchain is headed. Edited excerpts: business models coming from China are very innovative as well. Japan, on the other hand, is leading in regulation—in terms of legalising payment systems. When the changes are fully legalised and regulated may be you will see financial institutions and exchanges listing bitcoins. I think India is also seeing positive progress in the blockchain space. I see a lot of Indian companies using Singapore as their base. One of the reasons is that South East Asia is a very good market. Relatively speaking, in South East Asia, mobile penetration is going up very quickly. Its last regulation was very friendly for cryptocurrency. I think in India financial inclusion will be a big push for the government. India can see financial inclusion as something where the blockchain industry can contribute and play an important role. Initially when the central banks warned against bitcoins, it was the right thing to do because bitcoins are a complex system. People should be aware about their complexity when they experiment with them. Over time, people have realised that bitcoins are quite resilient. However, at the same time, there are a lot of scam coins now. These scam coins pretend to be cryptocurrencies. Public should be aware that they should not buy something they don’t understand.

Don’t put a lot of money into cryptocurrency. In the initial stage, treat it as an experiment and learn how the new economy works.

As years pass, the central banks are realising that printing money is a cost for them. Cash is not transparent either. Virtual currency is much more transparent. There used to be not much correlation among cryptocurrencies. I think people are beginning to own more and more cryptocurrencies now. A lot of these tokens are interrelated so the correlation has gone up.

Now it is bitcoin verses the rest of the cryptocurrencies. Currently bitcoins account for 40-50% of cryptocurrencies in the world in terms of value of market share.