Indian State Intends to Use the Blockchain to Protect Citizen Data

The Indian state of Andhra Pradesh has announced it is working with cybersecurity firm WISeKey to store citizens data on a blockchain securely.

Andhra Pradesh, bordering India’s southeastern coast, is the seventh largest state in the country. In an announcement, Swiss-based WISeKey and Andhra Pradesh will explore blockchain technology proof-of-concepts as pilot projects across a variety of departments.

The aim is to simplify processes and to enhance security in light of cybersecurity attacks worldwide. Earlier this year, malicious malware known as WannaCry crippled over 75,000 computers in 150 countries. It was the most audacious cyberattack to take place. According to Microsoft, it was a ‘wake-up call’ for governments to take action to prevent these attacks from happening. Shortly, thereafter, the NotPetya cyberattack targeted vulnerable computers around the world. Many victims were ordered to pay bitcoin ransom demands to receive access to their files.

In an attempt to take decisive steps, the government in Andhra Pradesh is taking measures to better protect citizen data. With a population of 88 million people there is a wealth of information that needs to be stored securely. To ensure this, it is teaming up with WISeKey to keep its various databases secure.

Carlos Moreira, founder and CEO of WISeKey, said:

“To have a pristine vision like putting the citizen at the center of gravity, and building all the infrastructure around this vision is the key to successfully empower citizens to unleash their full potential.”

JA Chowdary, special chief secretary & IT advisor to the chief minister of the government of Andhra Pradesh, said:

“We are looking towards WISeKey to play a leadership role in providing cybersecurity for the various initiatives of the government, but also drawing out the vision for smart cities who want to go beyond IoT, automation and use “Deep Tech” algorithmic technology.”

While N. Balasubramanyam, CEO and e-pragathi & transport commissioner for the government of Andhra Pradesh, added:

“Andhra Pradesh will be one of the first states in the world which will be implementing the blockchain technology in the transportation department.”

Andhra Pradesh to Record Land Deals on the Blockchain

In August, it was reported that the state of Andhra Pradesh was exploring the distributed ledger to record land deals. A second Indian state, Telangana, is also considering it too. The aim is to provide transparency to a corrupt system that leaves the poor at risk.

Most land ownership in India dates back to the colonial era. As such, knowing who owns what is fraught with difficulties. As a result, many people, particularly the poor, are left vulnerable with disputes ending up in court.

However, the use of the blockchain could provide better transparency for all concerned.

Vishal Batra at IBM Research, who works on the technology, said:

“The land registry is a good candidate for blockchain as there is no way to verify titles quickly. The process lends itself to fraud, as an owner can re-sell a property, and the buyer is ignorant. With blockchain there would be savings and efficiency, and there can be no fraud.”

Once a sale has been recorded on the blockchain, land owners, banks, sellers and brokers can track the record. This, in turn, gives everyone peace of mind that everything is above board.

Chowdary added:

“We are already digitising all land records, so this can be the next step.”

McKinsey Global Institute, the research arm of the global consulting firm, states that India’s land markets are hindering the country from producing more growth. Consequently, lost gross domestic product growth each year accounts for 1.3 percent.

Indian State to Secure Ration Cards with the Blockchain

These latest steps by Andhra Pradesh are not its first venture into the blockchain. In fact, its first steps can be traced back to 2016.

As early as then it was looking into the technology to fight cybercrime. As a result, it became the first state in Asia to implement the blockchain to provide cybersecurity and curb hacking.

This is significant considering the state’s government looks after a datebase of 103 million ration cards. N. Sambhasiva Rao, the director general of police in India, said at the time:

“Now the government has been encouraging to increase cashless and digital transactions from the present 10 percent to 50 percent.”

Ripple Opens New Office in India

Fintech payments firm Ripple has opened a new office in India’s business capital, Mumbai.

It’s hoped that the company will be capable of providing more customers with a faster settlement of international payments.

India has a population of 1.3 billion people. This expansion into India provides Ripple with a wealth of opportunities. Namely, because the country is the largest remittance receiver in the world. Ripple’s main objective is to get banks more attuned to the blockchain as a way of delivering faster payments.

For those sending money to India they may soon find themselves turning to Ripple’s services.

Navin Gupta, who has been appointed Country Manager for Ripple India, said:

“India is the largest recipient of corporate and retail remittances worldwide, totalling close to $71 billion. The businesses and Indian expatriates sending money into the country want their cross-border payments to be as fast and seamless as payments made within India’s domestic digital payment network.”

“Ripple’s instant, cost-effective blockchain-powered payments can be a transformative component of India’s economy, helping bring the many who have limited access to payment services into the fold.”

It remains to be seen what success this will bring to Ripple. Yet, considering India receives the most remittance payments in the world, the firm may see an uptick is users.

Turning to a Cashless Society

Over the last few years, India has been taking significant steps to embrace a digital agenda. What has helped to push the country forward was the removal of its two biggest banknotes: the Rs 500 and Rs 1,000.

Last November, Narendra Modi, India’s prime minister, ordered their removal. As such around 90 percent of the nation’s currency was wiped out overnight. The aim was to prevent terrorism, corruption and black market money.

While it was no doubt a drastic move for the country, it has aided its journey toward a digital society.

Featured image from Shutterstock.

Indian States Look to the Blockchain Technology to Record Land Deals

Two Indian states are reported to be exploring the blockchain to record land deals to bring transparency to a corrupt system that leaves the poor at risk.

With the aid of the distributed ledger it is hoped that it will modernise an outdated system and boost economic growth. The southern states of Andhra Pradesh and Telangana are considering the blockchain to record land deals.

According to a report, most land records in India date back to the colonial era with land holdings uncertain of ownership. This can leave many people, particularly the poor, vulnerable with disputes over titles often ending up in court.

As fraud is a major issue with land deals the blockchain could alleviate this problem, bringing greater efficiency and transparency.

Vishal Batra at IBM Research, who works on the technology, said:

“The land registry is a good candidate for blockchain as there is no way to verify titles quickly. The process lends itself to fraud, as an owner can re-sell a property, and the buyer is ignorant. With blockchain there would be savings and efficiency, and there can be no fraud.”

Once a land record has been recorded on the blockchain all parties involved – land owners, sellers, banks and brokers – can track the deal. As the distributed ledger is an immutable record there is no way to falsify the information or change the data. This then gives all those concerned peace of mind to know that everything is correctly in place.

J.A. Chowdary, technology advisor to the Andhra Pradesh government, said:

“We are already digitising all land records, so this can be the next step.”

According to McKinsey Global Institute, the research arm of the global consulting firm, India’s land markets are preventing the country from producing more growth. As a result, lost gross domestic product growth each year accounts for 1.3 percent.

However, while the blockchain is being touted as the answer to India’s land registry issues, it can’t solve everything, according to the director of land laws and policy at advocacy group Landesa.

Sunil Kumar said:

“What if the data is incorrectly captured? To get a clean record, you need clean inputs. For that you need community involvement, particularly in rural areas, to verify ownership and resolve disputes.”

However, while Kumar may have some misgivings about what the blockchain can do, there are already other countries who have embraced the technology specifically for recording land deals.

Countries Embracing the Blockchain for Land Registry

Sweden is one country that is turning to the distributed ledger to improve the recording of land deals.

Last year, the country’s land registry authority, the Lantmäteriet, undertook a trial with the blockchain. The success of it meant that at the end of March the authority had moved to the second stage of the project.

According to Henrik Hjelte, ChromaWay CEO, it could add an economic boost to the country. Not only that, but Hjelte believes that Sweden is the ideal place to test the blockchain for land recordings as public trust in the authorities is high. As such, this will provide the incentive for other agencies to follow suit.

The U.K. is another nation that is utilising the distributed ledger. Her Majesty’s Land Registry, a U.K. government agency responsible for land ownership, revealed in May that it was conducting a project using the technology to register property.

In a report, this move would significantly transform the country’s 150-year history as it turns to speed, simplicity and an open approach to data.

In February, the Republic of Georgia joined forces with Bitfury Group, a provider of blockchain infrastructure, to use the blockchain to record property-related transfers. This marked the first time that a national government had employed the distributed ledger to confirm and secure government actions.

Countries such as Denmark, Ghana and the U.S. have also started the Bitland program to reclaim usable land titles and free up trillions of dollars for development in West Africa. Starting in Ghana and spreading through the rest of the African continent, it’s hoped that it will help to educate the nation on documented land ownership and how the blockchain can help to achieve this.

These are just a few of the countries that are turning their attention to the distributed ledger to improve how land ownerships are recorded.

The Blockchain Gains Prominence

As the technology develops and grows, more sectors are realising the benefits that it can provide. So much so, that one has to ask: how did we survive without it before? Such thinking also makes one think of how people survived without the Internet before it burst on the scenes in the late 90s. For many, the blockchain is becoming the next Internet sensation.

What’s important, though, is that we have the blockchain now and, consequently, many industries are using it to better their services.

Whether it’s within finance, healthcare, humanitarian, education or food supply, the blockchain is making its presence known.

One area where this can be seen includes tracking where China’s chickens are coming from. Confidence in China’s food supply is at an all-time low due to the number of food safety issues that have come up in the past. However, in a bid to improve consumer confidence with the country’s food it’s hoped that the blockchain will give people the peace of mind to know where their food is coming from.

The United Nations World Food Programme (WFP) is also employing the technology. In order to ensure the food and aid is reaching those in need, the UN undertook an experiment in May to see how successful it was by distributing aid to 10,000 Syrian refugees. The success of the trial meant that the agency was extending its reach to 100,000 refugees by the end of August with plans to include the entire Jordanian refugee population by the end of 2017.

With so many use cases underway featuring the technology it shows the importance and impact that it is having and the trust that people are willing to put into it to provide better services for many people.

Featured image from Shutterstock.

Survey: 97% of Indian Traders Are Aware of Bitcoin, but Use Remains Low

A new survey has been released by India’s market and trade body that shows while 97 percent of Indian traders are aware of bitcoin, it’s use among them remains low.

At a meeting called ‘Roundtable on Industry Perspective on Bitcoins: A New World of Payments and Deals,’ the PHD Chamber of Commerce and Industry, which overseas India’s industrial development, asked over 200 participants from a range of industries if they were aware of the digital currency. These included traders from electronic devices, fabrics and automobile parts industries. The objective was to see what impact bitcoin was having on companies within India.

According to the findings, though, while 97 percent of Indian traders are aware of the digital currency, its use within their services remains low.

In a report from News 18, Gopal Jiwarajka, President of the PHD Chamber of Commerce and Industry, said:

“Absence of the information about counterparties in the bitcoins transaction is a major drawback and may lead to unintentional transactions such as money laundering.”

He added that the use of bitcoin brings with it huge risks and that it is only the demand for it that is seeing increased optimism.

Bitcoin Gains Popularity in India

News of this will no doubt surprise many. Only recently a professor of finance at New York University said that digital currencies such as bitcoin were replacing gold among the younger generation in India.

Aswath Damodaran, who is known as the ‘dean of valuation,’ said that when people no longer trusted paper currencies they typically turned to gold, but now:

“Cryptocurrencies have taken the role of gold at least for younger investors because they don’t trust paper currencies.”

With many of India’s nation losing confidence in its currency a rising number of the country’s citizens have been turning their attention to bitcoin. This is particularly the case among the 18-35 age group.

This may be down to the fact that last November India’s prime minister Narendra Modi removed 86 percent of the nation’s currency overnight. With many of the population left in the lurch a significant rise in bitcoin trading was experienced.

Bitcoin Regulation in India?

At the moment the discussion of regulating bitcoin in the country is undergoing.

In the past there have been calls from Indian politicians to declare bitcoin illegal. According to Kirit Somaiya, a member of the Indian Parliament who belongs to the Bharatiya Janata Party (BJP), a right-wing party in India, he has considers bitcoin as a pyramid-ponzi scheme and has termed it as such in the past.

However, it’s unlikely that the digital currency will be declared illegal in the country after the Indian government set up an interdisciplinary committee to look into the risks associated with bitcoin.

Of course, one of the issues with the digital currencies regulatory regime, is who will oversee it.

According to an official:

“Discussions till now suggest that bitcoin will most likely fall under the ambit of the RBI [Reserve Bank of India]. But some are of the opinion that bitcoin is a security rather than a currency and should be regulated by SEBI [Securities and Exchanges Board of India].”

Only recently it was reported that the Indian government was considering putting a ‘goods-and-services tax‘ on bitcoin purchases in light of the regulatory discussion.

India certainly has a wide reaching market that can benefit from the use of digital currencies, particularly considering that India has one of the fastest growing smartphone markets in the world. It, therefore, remains to be seen what the government will decide who will oversee its regulation.

Yet, with a young market that can help boost the adoption of the digital currency, it may be surprising to many to learn that its use still remains low within many industries.

Japan Embraces Bitcoin

Unlike India, Japan has taken the step of legalising the digital currency so that it can be used as a form of payment for goods and services. So much so, that by the end of 2017, it’s expected that there will be 300,000 stores accepting the currency as a form of payment.

Low-cost Japanese airline Peach Aviation Ltd., announced earlier this year that it would start accepting the digital currency as a form of payment for flight purchases.

According to the CEO of the company, it is hoped that by accepting bitcoin for flights it will attract tourists to the country after a rapid growth of the currency in Japan.

Shinichi Inoue said:

“We want to encourage visitors from overseas and the revitalization of Japan’s regions. This is a real first step in partnerships for Japan and we are aiming for more company and service tie-ups.”

Such a move has helped push the country and the cryptocurrency forward as its real world value becomes more prevalent.

Even though India doesn’t appear likely to term it as a currency like Japan has, it still marks a significant step forward for the country. It also highlights India’s interest in pushing for a digital economy, which finance minister Arun Jaitley has been pushing for since the country’s demonetisation last November.

Keeping Tabs on Bitcoin

With rising interest in the digital currency being witnessed in India, officials are keen to ensure that the public aren’t taken advantage of from companies that deal with bitcoin.

So much so, that the Ministry of Corporate Affairs (MCA) informed the Serious Fraud Investigation Office (SFIO), regional directors and the Registrar of Companies to collect information on the firms that are involved in bitcoin.

The instructions sent were issued to see:

“[I]f the investors/ depositors/ public or stakeholders are being prejudicially affected and/ or such companies are using this mode of investment to lure the gullible public in collecting funds.”

It’s hoped that by doing so they can keep on top of any potential risks they may need to take care of. Bitcoin may not be banned in India, but the fact that it’s not regulated can pose a risk to people who don’t fully understand what it is.

It remains to be seen whether more traders will start using the digital currency in their services once it has been regulated.

Featured image from Shutterstock.

Indian Government May Put Tax on Bitcoin Purchases, Say Reports

The Indian government is considering whether to introduce a goods-and-services tax on bitcoin purchases, according to local reports.

According to The Hindu, the government is thinking about implementing a regulatory regime for digital currencies such as bitcoin which would enable a tax levy.

At the moment in India digital currencies are neither legal or illegal; however, the uncertainty over its existence and how it should be treated is left floating in a grey area. If such a regulatory regime is introduced, trading may fall under the oversight of the stock market regulator, the Securities and Exchange Board of India (SEBI).

For months officials in India have been meeting to determine the fate of bitcoin and how it should be classified. Many opponents of the digital currency have called for it to be banned.

Kirit Somaiya, a member of the Indian Parliament who belongs to the Bharatiya Janata Party (BJP), a right-wing party in India, raised the issue in April declaring that bitcoin should be declared illegal.

Whereas the Reserve Bank of India issued a statement on its position with the digital currency saying that users of the currency should take responsibility for any risks they encounter.

It said:

“The Reserve Bank of India advises that it has not given any licence / authorisation to any entity / company to operate such schemes or deal with bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with virtual currencies will be doing so at their own risk.”

However, because of the perceived risk of trading with bitcoin the government is maintaining a close eye on companies that deal with the digital currency to ensure that traders aren’t being taken advantage of. As a result, the Ministry of Corporate Affairs (MCA) informed the Serious Fraud Investigation Office (SFIO), regional directors and the Registrar of Companies to collect information on the firms that are involved in bitcoin.

The instructions sent were issued to see:

“[I]f the investors/ depositors/ public or stakeholders are being prejudicially affected and/ or such companies are using this mode of investment to lure the gullible public in collecting funds.”

Legal Framework for Bitcoin

In April, the Indian government set up an interdisciplinary committee designed to look into the existing legal frameworks regarding digital currencies which have been a ‘cause for concern.’

It was reported that the committee would submit their report on their findings some time in July; however, it was believed that an outright ban on bitcoin would be unlikely.

Now, according to The Hindu, it looks as those new details are emerging regarding the currency’s fate, which includes the possibility of implementing taxes.

A senior government official said:

“The discussion on whether cryptocurrencies should be banned or regulated has been on for some time. The pros and cons for both aspects were put forth in the meeting chaired by Finance Minister Arun Jaitley last month.”

Yet, while a proposal to ban bitcoin was also addressed at the meeting, it’s reported that there were few takers of the idea.

In the past Jaitley has pushed and promoted a digital agenda to limit the use of the country’s national currency.

Seeking comments from the public on whether bitcoin should be banned, regulated or subject to self-regulation were also undertaken. The results of which the government found that 80 percent of the public are supportive toward digital currencies, prompting the intergovernmental committee to look at several options regarding the legality of bitcoin.

In response, another official said:

“Banning will give a clear message that all related activities are illegal and will disincetivise those interested in taking speculative risks, but it was pointed out it will impede tax collection on gains made in such activities and that regulating the currency instead would signal a boost to blockchain technology, encourage the development of a supervision ecosystem (that tracks legal activities and may also assist in tracking illegal activities) and promote a formal tax base.”

Limited Regulation

At the meeting the idea of limiting regulation of the digital currency was also proposed. This would mean that bitcoin would not be recognised and that the trading of it would be at the risk of the individual involved, The Hindu said.

However, as the report states if the decision to regulate bitcoin was enforced it would be seen as a ‘digital asset, similar to gold,’ which would enable owners of the currency to trade them on registered exchanges.

Yet, the government appear weary of this approach and that such a measure could ultimately push the currency’s price up which, in turn, could produce an ‘investment bubble.’

There have been claims from various quarters that bitcoin is in a bubble and that its price will come back down again after experiencing record highs throughout the first half of 2017.

As of the 14th July, the price of bitcoin is trading at $2,215, according to CoinDesk’s Bitcoin Price Index (BPI), a significant drop from its June record of $3,000. Subsequently, its market value has dropped to $36 billion from over $40 billion.

Checking Bitcoin Transactions

Interestingly, the news of India’s progress on bitcoin’s legality comes at a time when the country’s Supreme Court has urged the RBI and the government to check digital currency transactions regarding money laundering and terrorism funding.

According to a report, the Supreme Court of India has given the RBI and the central government a four-week deadline ‘to examine all security related issues pertaining to virtual currency, including bitcoin.’

The report states that it was claimed that the RBI was failing to regulate transactions involving the digital currency and that it was alleged that the currency was being used to finance terrorist funding and money laundering.

Given the fact that bitcoin has gained prominence in India it will be interesting to see what impact this could have on the decision of whether to regulate the digital currency or not. It will also be interesting to determine what results the central bank and the government find to provide to the court.

A recent EU report found that digital currencies were being rarely used by criminals to finance terrorist funding and money laundering because the technology ‘requires knowledge and technical expertise which has a dissuasive effect.’

Featured image from Flickr via Suriaa.

India’s Government Report Expected in July, Bitcoin Ban Unlikely

An Indian intergovernmental committee tasked with looking into whether digital currencies such as bitcoin should be regulated is due to submit its report at the end of July.

Earlier in February, the Reserve Bank of India (RBI) issued a statement regarding its stance on bitcoin, stating that it would be the public’s responsibility for the risks they take when dealing with digital currencies.

The bank said:

“The Reserve Bank of India advises that it has not given any license/authorisation to any entity/company to operate such schemes or deal with bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with virtual currencies will be doing so at their own risk.”

As a result, in April the government established an interdisciplinary committee to examine the existing frameworks regarding digital currencies which have ‘been a cause of concern.’

Back in 2013, the RBI voiced its concern on digital currencies cautioning those who hold the currency to be aware of the risks they are exposed to.

This was followed up by a call from Kirit Somaiya, a member of the Indian Parliament who belongs to the Bharatiya Janata Party (BJP), a right-wing party in India, declaring that bitcoin should be made illegal.

Yet, despite this, a petition from within the Indian bitcoin community is urging politicians and lawmakers to deem digital currencies as legal, claiming that they provide the country with opportunities for innovation and development.

According to the petition, which is due to be delivered to Arun Jaitley, India’s Finance Minister, Dr Urjit R Patel, the Governor of the RBI and Shri S Selvakumar, the Joint Secretary of the Ministry of Finance, it could save India US$7 billion by employing cryptocurrencies for inward remittances at the same time as providing the poorest Indians financial inclusion at low costs.

Before the release of the report next month, the Committee is tasked with:

  • Determining the current position of virtual currencies in India and worldwide;
  • Looking into existing global regulation and legal frameworks surrounding virtual currencies;
  • Putting forward measures that will deal with customer protection, money laundering, etc. when dealing with virtual currencies; and
  • Delving into any other matter regarding virtual currencies that may be relevant.

In addition to discussing with government ministries and the bitcoin community in India, the Committee has also taken into account public opinion in the country.

In May, India’s Ministry of Finance opened a government portal where the public could submit their comments on the market. The public had until the 31 May to submit their thoughts on where they believed the market could head.

More specifically, the government sought answers to the following:

  • A) Whether Virtual Currencies (VCs) should be banned, regulated or observed?
  • B) In case VCs are suggested to be regulated:

 

  •  i) What measures should be taken to ensure consumer protection?
  • ii) What measures should be taken to promote orderly development of VCs?
  • iii) What appropriate institution(s) should monitor/regulate the VCs?

 

  • C) In case VCs are not suggested to be regulated:

 

  • i) What should be the effective self-regulatory mechanism?
  • ii) What measures should be adopted to ensure consumer protection in this scenario?

Public results have found that around 80 percent are supportive of digital currencies while 10 percent have decided to remain neutral. Furthermore, it seems that a ban on virtual currencies is unlikely to take place, according to an unnamed senior government official.

In a report from MoneyControl, the official said that the Committee is looking at several options regarding the legality of bitcoin, but that it is continually watching the market.

“We may monitor these currencies for some time and then see how it progresses. It can then be concluded if at all there is a need for a regulator.”

However, the official added that the chances of legalising the digital currency is ‘very bleak,’ but that banning them wouldn’t be an easy task. Namely because knowing who is using the currency or operating it, is not known.

Bitcoin Grows in India

Even though the currency isn’t regulated in India, its use among its citizens is rising.

According to the World Bank, there are two billion adults without access to traditional financial services, making it hard for them to access money.

Digital currencies, however, are proving a viable way of accessing money. Not only that, but India, which is reported to have the world’s fastest-growing smartphone market, is predicted to have 1.4 billion phone subscriptions by 2021.

With a smartphone costing as low as $25 to $30 it’s easy to see why the affordable smartphone arena is growing in India.

Connecting bitcoin and smartphones seems to be a win-win situation for both areas. With a younger generation constantly glued to their phones and more in tune to technological progress, it seems this could help to boost their growth. Not only that, but it’s reported that there is an increasing demand for digital currencies among the 18-35 age range.

Keeping Tabs on Companies

However, even though bitcoin is gaining in popularity among India’s citizens, the Indian government is still maintaining a close eye on companies that deal with the cryptocurrency.

With a currency that is not regulated nor is it banned in the country, officials want to make sure that the public are not being taken advantage of.

Of course, when a national currency crisis takes place, which is what happened last November when India’s government wiped out around 86 percent of the national currency overnight, it’s understandable that people will turn their attention to other assets to get by on. In a bid to crackdown on black money, the country’s Rs 500 and Rs 1,000 bank notes were removed from circulation. As such, bitcoin became the currency of choice presenting many with an alternative option to cash.

A Favourable Outcome?

It seems that so far India is more in favour of digital currencies and is likely to continue supporting them in the long run.

Not only that, but since the country’s demonetisation steps have already been put into place to help push a digital agenda. At the moment, cash represents around 78 percent of transactions in India, but it’s thought that this number will reduce to 50 percent by 2020.

While a lot can still happen between now and then, pushing the digital agenda will help to change how people pay for things and the way they do so.

Featured image from Flickr via Maciej Dakowicz.