At the Global Fintech Fest in Mumbai, one of the world's largest financial technology conferences, discussions on cryptocurrency and stablecoins were notably absent. Organizers issued guidelines to more than 800 speakers, advising them to avoid the topics, reflecting India's ongoing regulatory uncertainty regarding digital assets.
The three-day event, which began on October 7 and attracted over 100,000 attendees from more than 100 countries, proceeded without mentioning bitcoin's recent surge to an all-time high above $125,000. Instead, the conference focused on government-backed initiatives and traditional fintech innovations.
Key Takeaways
- Organizers of the Global Fintech Fest in Mumbai explicitly instructed speakers to avoid discussing cryptocurrencies and stablecoins.
- The event, with over 100,000 participants, highlighted India's cautious regulatory stance on digital assets, contrasting with more open policies in other Asian financial hubs.
- The conference focused on India's Central Bank Digital Currency (e-rupee) and other sanctioned fintech products, with over 50 launches from companies like PayPal and Revolut.
- Industry experts expressed concern that the lack of regulatory clarity is stifling innovation and investment in India's digital asset sector, potentially leading to a loss of talent.
A Clear Directive to Avoid Crypto
Speakers at the high-profile conference received a clear set of instructions regarding their presentations. According to a document shared with Reuters by an attendee, the guidelines stated, "Please avoid political, crypto, religious, or personal remarks on stage or at the venue."
This directive effectively silenced any significant conversation about the global digital asset market, which has a market capitalization exceeding $4 trillion. The omission was particularly striking as it occurred while Bitcoin was reaching unprecedented price levels, a milestone that went unacknowledged from the main stages.
The event was organized by prominent Indian financial bodies, including the Payments Council of India, the National Payments Corporation of India, and the Fintech Convergence Council. Their decision to steer clear of crypto highlights the deep-seated caution within India's regulatory framework.
Contrasting Approaches in Asia
India's approach presents a stark contrast to that of other major Asian economies. Jurisdictions like Hong Kong, Singapore, and Japan have been actively working to establish themselves as regional hubs for the cryptocurrency industry. They have implemented regulatory frameworks designed to attract digital asset companies and foster innovation.
Focus on Sanctioned Innovation
Instead of crypto, Indian regulators and industry leaders at the fest spotlighted government-approved financial technologies. The Reserve Bank of India (RBI) used the platform to promote its Central Bank Digital Currency, the e-rupee. The central bank also announced new pilot programs for deposit tokenization and the creation of a regulatory sandbox for emerging fintech companies to test their products in a controlled environment.
The event still saw a flurry of activity, with over 50 new products making their debut. Notable launches included PayPal's global wallet platform, new biometric authentication methods for India’s Unified Payments Interface (UPI), and the official Indian launch of the UK-based payment platform Revolut.
Industry Voices Concerns Over Regulatory Ambiguity
The prevailing regulatory uncertainty is creating significant challenges for businesses and investors in India. Mandar Kagade, founder of Delhi-based Black Dot Public Policy Advisors, noted the direct impact of this environment.
"The policy ambivalence has a chilling effect on the development of commercial use cases for stablecoins in India," Kagade stated.
This sentiment was echoed by others in the industry. Several executives speaking on the sidelines of the event mentioned that while the crypto sector offers new business opportunities and could attract investment, there is minimal interest in pursuing them without clear regulatory approval from the government.
Fintech Funding Declines
According to data from Tracxn, India's fintech sector experienced a significant drop in funding. In the last year, it raised a total of $3.5 billion, the lowest amount since 2020. This is a steep decline from the peak of $9.2 billion raised in 2021, suggesting that regulatory uncertainty may be impacting investor confidence.
Even officials from institutions linked to the central bank acknowledged the cautious pace. Sahil Kini, CEO of the Reserve Bank of India Innovation Hub, remarked during a session, "There is cause for fair degree of caution (on stablecoins). I don’t think this kind of stance changes overnight."
Calls for a More Iterative Approach
Some experts believe that India's all-or-nothing approach to digital assets could be detrimental in the long run. They argue for a more gradual and adaptive regulatory process.
"Regulators need to have an iterative approach instead of the complete aversion they have towards stablecoins currently," said Joseph Sebastian, vice president for investments at the venture capital firm Blume Ventures. He suggested that a practical first step could be to permit inward remittances using U.S. dollar-pegged stablecoins.
Global Stablecoin Market Growth
The global market for U.S. dollar stablecoins has grown substantially, with a total market capitalization now exceeding $300 billion, according to data from CoinGecko. This highlights the significant economic activity that India is currently positioned outside of.
The Risk of a 'Brain-Drain'
The lack of clear rules is not just hindering investment; it is also reportedly causing a migration of talent. Vivekdeep Gupta, an independent consultant specializing in digital assets, warned of the consequences of inaction.
"It’s becoming real whether we like it or not, so it's imperative to figure out how to engage with it," Gupta said. He added that while there is a "huge amount of energy" in India's developer and entrepreneurial communities, the "lack of regulatory clarity is also causing brain-drain."
This observation points to a growing trend where Indian-founded crypto and Web3 startups choose to incorporate their businesses overseas in more favorable regulatory climates. This allows them to access global capital and talent pools without the uncertainty they face at home, representing a potential long-term loss for India's digital economy.
