Web 3.0 is not about crypto alone. And Web 3.0 is not UPI. They are totally different products / concepts.
A recently popular quote from a technology leader in a business magazine went viral: “Meanwhile, as those same hypesters now promote a mystical Internet world called Web3, India is racing ahead and implementing what the crypto crowd had promised—with its UPI.”
What was probably intended to glorify one of our innovations (UPI) sadly colours the narratives around technological innovations and possibilities, as if the concept (Web3.0) does not exist. For one innovation to be popular, it does not mean the others need to be brushed away.
We must celebrate our innovations so far; but not at the cost of shunning emerging technologies; potentially some of these could bring ingenuity to our industries and markets. Have we forgotten that the Adhaar framework had early sceptics? Same with the various conversations about UPI, RuPay etc. If one had shared similar scepticism around each of our India Digital Stack offerings when they were being ideated, we would not have innovated this brilliantly.
Is there any correlation between polity will, policy push and industry innovation shaping into societal benefits? Researchers can probably easily defend this hypothesis with empirical evidence.
There is no doubt that India is leading in digital innovation and at low cost for high impact. That our policies have encouraged young entrepreneurs to use technology in attempting to solve daily issues is proven well. We are right now celebrating Digital India week and its young constituents who have showcased its potential.
The digital revolution has triggered possibilities of shaping societal narratives using emerging technologies. Yet the challenge is that until technologies become commercially popular, it is difficult to imagine how it could solve human problems. Such is the plight of Web 3.0 for now. To write it off as “hyped-up” in one broad stroke is far more dangerous.
Young demographics & digital possibilities
India is one of the fastest-growing internet consumer markets and has one of the most flourishing pools of start-ups and developers across the world. Web3, or Web 3.0, the next generation of the internet, is conceptualised on blockchain or distributed ledger platforms, and involves decentralising the overall structure of the internet. It is still in evolution phase.
A recent report from the US India Strategic Partnership Forum (USISPF) and Cross Tower estimates that Web 3.0 and digital assets could add $1.1 trillion to India’s GDP over the next decade.
With over 845 million internet and 518 million social media users in 2021, India is the 2nd largest internet user in the world. By 2040, the total number of Internet users in India is expected to cross 1.53 billion and yet the overall demographics will remain and productive with median age of 35 years.
A look at the finance industry
If we look at the issues of the wider finance sector, once can see the need for speedy disintermediation and to put the consumers incharge. The years of attempts at financial inclusion using physical distribution of financial products did not work out.
“Why are the banks still struggling with and not willing in serving smaller entrepreneurs and businesses?”
“Why does it take 2-3 days for a stock market transaction to be closed?” Considering that most of the stock markets are digital.
“Why is the access fees for credit card still expensive for vendors or merchants?”
“Why are the regulators still concerned about the growth of FinTechs?”
“Why does it seem as if we celebrate the traditional financial institutions, however poorly they have demonstrated capabilities and financial impact on the society?”
Another way to solve these is to look at using technology to solve for these. Especially on the quality of what financing can do to transform citizenry expectations. Needless to ponder, the usual industry lobbying of the incumbents of the centralised finance will continue. It could also use its network in the fear-mongering of what could be short-term ills of technology enables decentralisation.
The governments and regulatory institutions will continue to have their concerns about new technologies, including the fear of losing control.
“Will Web3 reduce governmental control over regulating the financial institutions?”
“Will decentralisation make it difficult for the governments to regulate the internet and its platforms?”
“Will any of these technologies bring challenges of national security or cause any systemic issues?”
“Will they further complicate consumer protection issues and cyber risk problems?”
With our strong digital stack and policy thinking, one looks to the government and proactive regulators, to disrupt status quo in the finance sector; and to create stronger and resilient financing mechanisms, for all. This would assume capacity & capability building around digital thinking within the regulatory organisations. This would propel us in developing an inclusive democracy with higher chances of financial inclusion & better financial impact.
We saw the fast evolving global economy when FinTechs, using the digital stack, enables adopting cashless and virtual payment technologies. In India, the government itself has been the biggest proponent to go cashless and digital. With adequate regulatory outlook and continued support to innovative use of technology in finance, India can lead the way to financial inclusion and impact.
The Web 1 and Web 2 internet businesses were largely western-led and even influenced by them. Some of these large global platforms influenced the global social and political narratives. India did not have the necessary economic heft or consumer influence in the starting years of the internet, to be able to participate in the global internet policy development. India with its huge young population, and being a large consumer market, has the chance to take the initiative in the global arena to shape Web 3.0 policies and governance.
At least now, can we lead the Web 3.0 policy stewardship? And not undermine its potential in the rush for headline management. After all, this is the right time to remind us of digital possibilities - The Digital India Week that we just celebrated!
The writer is a corporate advisor and independent markets commentator. His Twitter handle is @ssmumbai