Either our government is planning a very nasty prank for Indian crypto community, or our mainstream media has gone crazy! But if former is the case, we’re in for a very cruel joke from the regulators in next few days. A recent report published by DNA India has suggested from citation of some ‘unnamed’ senior finance ministry official that government is considering to allow crypto tokens for use in place of Metro smart cards and Air miles of airlines. The official said:
“The committee is examining if crypto tokens can be used to replace smart cards such as metro cards in the public sector to start with. Similarly, in the private sector, it can be used in loyalty programmes such as air miles where its use is limited to buying the next ticket and can’t be converted into money.”
So far, so good. How is this a nasty prank, you may ask? Well, because of the definition of crypto token given by that official. According to DNA’s report the same official further said:
“One will need to pay physical money to buy a token which could be stored as a code in any basic mobile feature phone. It can even be used for remittances. So, it is easy to implement from technology as well as regulatory point of view. But in case of cryptocurrency, one needs to allow it as a legal tender first.”
And that’s where the problem is… “stored as a code in feature phone”, and “can’t be converted into money”. No wallets involved. No private keys needed. No mining/validation of transactions needed. Pre-mined/minted by the creators, and infinite supply.
How is this thing different from voucher codes then?
Does using blockchain technology for voucher codes make them crypto tokens? If that’s what government is planning to implement, then we’re soon gonna become a subject of ridicule for global crypto community. In that case let’s pray that these tokens never come to life!
Or is it misreporting?
However, at the same time there’s also one more possibility. DNA’s report may also be lacking/misrepresenting some facts. The majority of Indian mainstream media doesn’t understand crypto and blockchain technology properly and in the past it has happened several times that facts have been misrepresented. It had happened at the time of budget announcement, and then also in June. On both those occasions we had clarified the things for our readers, so we can’t say whether regulators are at fault or media.
Whatever the case, these tokens should not be implemented. Prepaid cards, voucher codes and even physical tickets exist to provide this functionality, and using blockchain for this functionality is just a wastage of time, money and computing power! Let’s hope that they’re not launched ever!