#IndianDataDollar: A whitepaper (Version 1.0: First Page)

Abstract: -

Lack of imagination in bad times is the biggest crisis. This is quite true of monetary management in the context of impending digitization of currencies, decline of dollar, confusing regulatory scenario around crypto currencies like Bitcoin and post-pandemic world. How can a politically and judicially limited entity like a nation-state respond to such an unprecedented global change? How can it regulate an essentially planetary scale of challenges where peer-to-peer actors are equally autonomous? The broader responses are half-baked CBDC designs, outright bans on crypto-currencies and maintaining a jittery status quo. This paper proposes that the primary reason behind this is the inability to look beyond its own monetary anchor that can be called “lender-of-the-last-resort” (LOLR) consensus. It means that a nation designs money-as-credit by creating one entity (like a central bank) as the ultimate monetary authority for its citizens. This money is called the legal tender as it is declared by fiat as the sole means of paying tax and settling debts within the jurisdiction of the national territory. LOLR consensus and legal tender are self-imposed limitations upon national imagination. India is no exception to this. Project #IndianDataDollar proposes a move from single legal tender to a dual legal tender system in the country. Second, it is issuance of a new currency called #IndianDataDollar (IDD) using the transparency features of blockchain technology. Third, it is the upgrading of a territorial sovereign state into a sovereign network state approved by the Parliament of India without putting the legacy monetary system at much risk. Fourth, it introduces a new taxation model via a standard transaction tax @2% in all the IDD transactions which means that it would neither need any manual tax collection machinery nor have any tax leakage.  Fifth, it is a lateral mechanism for building a regulatory framework for crypto currencies by making them fully convertible with IDD. Sixth, it offers a Universal Basic Income (UBI) for 1 billion data users of post-pandemic India to the tune of INR9.49 trillion to be distributed in 10 equal monthly instalments. Seventh, it offers transformation of Indian telecom into a zero-debt sector by making them last-mile distributors for IDD. Eight, it makes telecom players major defenders against potential ill-effects of global roll-out of Chinese digital Yuan or Facebook’s Libra (now called DIEM) or currency cold war between US and China.