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How India is Using Blockchain as an Antidote to Economic Ruin

More than a few financial investors are targeting the territory in consideration, mainly to address the technological issue, which is one of the country’s main economic bets

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For at least a decade, India has been considered an “emerging economy” of sorts, becoming perhaps one of the most vibrant countries in the southern region of the Asian continent.

It is expected, in turn, to be one of the Asian countries, as a whole, with the highest growth rates in terms of Gross Domestic Product (GDP) in this five-year period, with scores of more than seven points.

More than a few financial investors are focusing on the territory in question, mainly to address the technological issue, which is one of the country’s main economic bets.

The Bloomberg agency points to India as one of the territories with the highest average salary ratio for software engineers. Moreover, cities such as Bangalore and Gurgaon (known for its lack of bureaucratic rigidity) are very attractive in these terms.

At the same time, the country has around three million graduates in IT-related higher education. The National Institute of Technology and the Indian Institute of Technology receive millions of applications every year.

Solutions with a more decentralized paradigm, such as blockchain, would also be stepping into the fray, as we will see in this article, although not all that glitters is gold.

The Indian state ensures too little financial and entrepreneurial freedom

According to the 2020 edition of the Economic Freedom Score produced by The Heritage Foundation, India is among the least free bloc of countries on the Asian continent. They note that it has “languished” in this position for about two decades.

They acknowledge that there has been some economic growth in these years (they speak of “robust” GDP growth), which they attribute largely to high private domestic consumption. They even point to a slight improvement in the average score.

However, it is worth repeating their warning about the alarming levels of restriction on financial and economic initiative (they warn that the State covers a large part of the banking sector and capital markets, with limits on foreign investment.)

At the same time, they warn that labor market regulations, which are not homogeneous throughout the national territory, can be considerably complex, although facilities have already been provided for tasks such as opening a business or obtaining electricity.

On the other hand, it should be noted that there is considerable political instability and insecurity in a country that ranks fifteenth among the fifty countries with the greatest “Christianophobia” in the world, according to a report by the Ordo Iuris Institute of Poland.

Decentralized finance as a factor of social and economic hope

Despite what has been addressed above, it seems that the decentralization intrinsic to the network of networks, manifested through the distribution and dispersion paradigm of blockchains would be having an effect.

India is the country in the world with the most users of cryptocurrencies (at least Bitcoin.) A figure that would be around, at least, one hundred million. Likewise, in the top 5 would follow countries such as the United States, Nigeria, Vietnam and the United Kingdom.

Well, to this we must add the high capitalization that, in recent years, several start-ups related to the kryptoeconomy are acquiring, well above the marker that would be around one hundred million. Mudrex and GoSats are some of the most recent examples.

According to the co-founder of the stablecoin DefiDollar (a type of cryptocurrency that, in theory, would be less subject to financial volatility, being able to be backed by another crypto,) a relevant reason was the boom experienced in December 2020 (although I would also consider January.)

However, as the CoinDesk¸ portal points out, it would be more accurate to attribute all this to the role played by so-called decentralized finance, better known by its acronym DeFi. The concept should be interpreted according to bit2me as a digitized financial paradigm in which currently commonplace entities such as banks and insurance companies would be relegated to as secondary a role as possible.

Customers would not need complicated intermediaries for their economic-financial transactions. It would be enough to participate in a Smart Contract, which speeds up the process, automating the clauses and their fulfillment (automatic arbitration.)

For this very reason, privacy stacks, protocol studies, decentralized autonomous organizations and decentralized exchanges (DEX) have begun to proliferate in India.

Thus, it can be said that the various applications of blockchain can help circumvent socialist statism’s problematic hindrances to free economic initiative. And as we have already seen, technology ultimately empowers society’s free initiative.

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