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Any Indian company can receive payment in either IDD
or any other crypto currency as well as can make global payments without any
problem. Banks can easily shift to a separate IDD terminal without many
technical challenges. Since every public key in the IDD blockchain network
would be seeded with a KYC-based institution, any suspicious transaction can be
reported and checked instantly by the validator nodes. To offset any threat
from other currency clones, Indian government can ask all the centralized
cryptocurrency exchanges to discourage the use of centrally issued stable coins
like USDT or USDC and replace them with IDD. When IDD can be directly converted
into any cryptocurrency or a foreign currency, the need for stable coins would
not be there.
4.0 How to
implement IDD on-chain?
........................................................................................................The basic objective here is to have a platform-agnostic approach. There
are many public chain options like Ethereum, Cosmos, Solana, Avalanche,
Cardano, Polkadot, Polygon etc as well as permissioned chains like Hyperledger,
Quorum, Corda, Multichain and so on. A large number of these solutions are both
scalable and interoperable. A base capacity of 1000 TPS can be enough to reach
one billion IDD transactions per day. The most suitable idea would be to use a
blockchain with the largest network effect that is technically compatible with
other chains. For example, Cosmos Ethermint, Avalanche and Polygon are
compatible with Ethereum. So, all the telecom players can float their security
tokens on any of them as well as can interoperate with the IDD chain. They can
build decentralised finance (DeFi) solutions using IDD as the native token and
for their own governance related issues, they can use their own security token.
In this way, the IDD economy can become global by default though the government
will need to design a framework for this. .................................................................
5.0 Precautions
There are some precautions to be followed in this
transition. First of all, the upgrade of legal tender laws is a must. Without
getting the approval of Indian Parliament, this change will not get the
validation it deserves. Token distribution framework should be made part of the
basic structure of Indian constitution as well as assimilated into the Consolidated
Fund of India. A
separate regulatory body comprising members from RBI, NPCI, TRAI and telecom
players should be instituted. RBI would have to curb the INR issuance
and factor the IDD issuance in the money supply. Even large currency
denomination notes particularly of INR 2000 value need to be withdrawn from
circulation as it does not offer any superior transaction value to majority
users. Big hoarders must be discouraged. The amount of current physical cash (M0) in the system
must be pre-declared. All
other money supply figures of M1, M2 and M3 must be pre-declared. Time-stamped hash of all such figures should be issued
by RBI and banks. A
provision of transaction tax to be included in tax laws so that IDD-to-INR
exchanges can be done seamlessly. 26% UBI token transfer and Zero-debt status
of Telecom sector is a must for telecom companies to avail banking license.
Full definition of “IDD banks” license
is also needed. For that, the commercial banking act should include telecom
players into its fold as a new category. Since it would not be a fractional
reserve banking model rather it would be a full reserve lending model, we need
to build this category carefully. ...................................................................................................
Millennials will be able to sign on early in this kind
of transition. As
time passes, this purse of 26% tokens will be exhausted over time. Since the
current smartphone users in India are in the range of 700 million plus, we shall have to speed up
to include those who are mobile users but not data users. .......................................................................................... If
the Parliament ever feels that the number of data users can go beyond 1
billion, they can also be added to the UBI beneficiary list. The number of EMIs
can also be increased to 12 instead of 10 too. This won’t add much burden as
the Reserve Pool will have a lot of space to entertain such provisions. To be
liberal on this front, we can even compensate
moving from higher to lower age groups to expand this number. 100% transparency
is must in terms of issuance and distribution.
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