Governments of the two most populated Asian countries, China and India, are actively adopting blockchain technologies to introduce digital versions of national currencies. But they do it in very different ways and for somewhat different purposes.
The recent endorsement of blockchain by the Chinese leader has sent the exchange rate of bitcoin 15 to 20% up, China has placed strict restrictions to circulation of this unregulated digital money. The communist government has declared the coming launch of the national digital currency, yuan.
Unlike bitcoin, the digital yuan will be built atop a permissioned ledger. It means that the Chinese government will have total control over the network. More than that, digital wallets required to store the digital yuan are to be issued by the central bank, which means the government will have unrestricted access to all information on any transaction.
A cashless economy has its obvious benefits, but the government of China intends to control every facet of the digital monetary system.
India is often described as the world’s largest democracy, and its government is also focusing on IndiaChain, which is to become the world’s largest government-owned blockchain network. India did not decide upon the launch of a digital roopee, even though such plans are currently in intense discussions with all major national agencies and market players.
The Indian concept of a national blockchain adoption is to enable different industry players create their own applications that in turn will benefit the national infrastructure. It will help to create a truly decentralized and blockchain based shared economy with market visibility unprecedented so far.
Hence, the difference between the Chinese and the Indian approaches to national digital currencies has roots in the difference between an authoritarian regime and a democracy.