New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

FinTechs and Virtual Currency (Shri R. Gandhi Deputy Governor March 1 2017 at the FinTech Conference 2017 organized by FICCI IBA and NASSCOM at Hotel Trident Nariman Point Mumbai)

FinTechs and Virtual Currency (Shri R. Gandhi, Deputy Governor – March 1, 2017 – at the “FinTech Conference 2017” organized by FICCI, IBA and NASSCOM at Hotel Trident, Nariman Point Mumbai) - News and Press Release - Dated:- 1-3-2017 - I am very glad that IBA, FICCI and NASSCOM are organizing this Conference as a Platform for Innovation and Collaboration with Upcoming and Promising (PICUP) Fintech. 2. Technology and banking have a long close association. Both have been benefitted immensely by th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

concept of money was understood, the concepts of lending and borrowing came into existence. However, the organised way of lending and borrowing happened when the prototypes of modern banks were established some 700 years ago. Banks undertook another service i.e., the remittance service. The mega trends in the fields of Information and Communication Technology have redefined banking and banks. Actually it is not redefinition, but de-definition. Banking is no longer what a bank does; it is also w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

financing, bill discounters, bill collectors, credit referrals, account aggregators, interest free products, syndicators, investment bankers, MFIs, co-ops, HFCs and credit rating agencies are some of the entities who chipped away chunk after chunk of banking. Is there an element of banking that remains the exclusive privilege of banks? 5. The chunking away of banking from the banks has given enormous business and growth for these non-banks. With their specialisation and focussed service renderi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he R & D structure of FinTechs. I would think these are the real FinTech entities. 6. As a definition, Fintech is usually applied to the segment of the technology startup scene that is disrupting sectors such as mobile payments, money transfers, loans, fundraising and even asset management. 7. The term has become a buzz word in the last three years. It is changing the way funds are raised, used, lent and borrowed, remitted. It is impacting not just entrepreneurs and businesses, but also ordi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ain. 9. Market Place Financing is also known as 'Crowd Funding' and generally refers to a method of funding a project or venture through small amounts of money raised from a large number of people, typically through a portal acting as an intermediary. There are numerous forms of crowd funding: some are charitable donations that provide no financial returns; others, such as equity crowd funding would fall within the domain of financial markets. Person to Person (P2P) lending is a form of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y dream of the death of regulators as well. 11. Likewise, the Blockchain Technology is also another disruptive innovation. The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Blockchains are an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. 12. Using this technology, certain innovative products whi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d. 14. Innovations, admittedly, bring in positive changes in efficiency, productivity, quality, competitiveness, and market share, among other factors. However, as innovations usually result in paradigm shifts, they are typically disruptive. It takes effort and time to understand them. The associated dangers include untested effects, lack of clarity on long term effects, and can lead to misunderstanding and misusing the innovation. Innovations can sometimes be bad per se; sometimes even good inn .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e we adopt such innovations. 16. What are the downside risks of Market Place Financing and Blockchain technologies? Market Place Financing links the fund raiser/s and fund provider/s. Fine. That eliminates the need for a financial intermediary and therefore all the costs associated with that. However, who guarantees the good performance of the fund raiser/s and fund provider/s? Who will enforce the contractual obligations? When each of them is faceless to one another, and is at great distance, e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nting Adult argument. Consenting adult argument cannot be presented when mass scale failure takes place. 17. I want to discuss a little more about the Blockchain or the distributed ledger technology and its professed capabilities to usher in virtual currency. 18. As regards death of currency, it is not a new subject. It has been predicted right from early 1950s. As you will recall, Isaac Asimov s Robot Series (1950s-80s) imagined a future where cash didn t exist; instead people earned credits th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

swiping for purchases they make, nearly eliminating the need for cash or credit cards. 20. Has currency died? Is it dying? Or at least will it die? In all these years, you will find that currency has actually increased in absolute terms, not just in developing and emerging economies where penetration of banking and finance is not yet complete, but also in the developed economies where the penetration of banking and finance has been far larger. Countries are printing more and more of currency. Pe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

strust on the prevalent system of currency and boasted of an anarchist philosophy to find the anonymous and independent digital currency. Wei Dai in 1998 attempted to create what was called the B-Money, a money that could not be taxed or tracked. Nick Szabo attempted to create Bit-Gold which will be difficult to solve (mine) and so will have value; he tried to create a puzzle of solving cryptographic equation which was further refined by the hands of Satoshi Nakamoto in Bitcoins. 23. Voila! You .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y, there is no central bank or monetary authority. They pose potential financial, operational, legal, customer protection and security related risks. VCs being in digital form are stored in digital / electronic media; are prone to losses arising out of hacking, loss of password, compromise of access credentials, malware attack, etc. Payments by VCs are on a peer-to-peer basis. No established framework for recourse to customer problems / disputes / charge backs, etc. is feasible. There is underly .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ver; it will impair its exalted status once, either of these elements gets affected. The confidence in BitCoins or for that matter any virtual currency based on blockchain or any other technology is also limited to its initial rounds and circles only; the initial rounds are always filled with adventurists and risk seekers; the moment masses get in, the risk-avoiders get in, they will need greater confidence for acceptance and that can come only if an authority issues it. As regards anonymity , t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version