Quick Intake
These type of articles are worth reading as they convey the INDIA’s approach towards adoption of blockchain in its Goverence and citizens services.
How they are viewing such a technology, The pain points they think of, various risks assosciated to the technology has been covered in this article.
Well, this is from CCI – Competition commission of india, which has expressed its views via discussion paper which was made in colloboration with EY !
The article majorly focuses on Public Blockchains and the issues w.r.t Jurisdictional issues and entites identification in case of possible data hacks and attacks.
Two major things covered are as follows –
- Given the decentralised nature of blockchains, there may not be any identifiable host, or an operator and the nodes may be spread across the globe with transactions occurring between the nodes located in different jurisdictions. Therefore, in case of any legal, policy or regulatory issue, it is difficult to understand which jurisdiction’s policies and regulations may apply,” the paper notes.
- “In the case of permission-less blockchains, network participants may be anonymous or pseudonymous, ie, their identities are not known fully. In such a scenario, policymakers and regulators are likely to face enforcement challenges in terms of identifying liable entities and penalising them for wrongful conduct.”
For those who wish to know the difference between Public and Private Blockchains –
Private Blockchains are something which are governed and hosted by few authorised entities and are hosted in private networks, While the Public ones are Permissionless and are being used / run by any party (sometimes without KYC even)
Enterrpise Blockchain solutions are Private where as Bitcoin / Ethereum Networks can be called as Public Blockchains
Read the entire article for more information !
Major financial bodies are looking more seriously at blockchain, the underlying technology of cryptocurrencies like bitcoin. The Competition Commission of India (CCI), in collaboration with EY, recently came out with a discussion paper on blockchain and its legal ramifications. The 50-page document, which has been reviewed by Business Standard, retains the government’s stand to allow innovation in blockchain but points to regulatory risks as this technology proliferates.
“Given the decentralised nature of blockchains, there may not be any identifiable host, or an operator and the nodes may be spread across the globe with transactions occurring between the nodes located in different jurisdictions. Therefore, in case of any legal, policy or regulatory issue, it is difficult to understand which jurisdiction’s policies and regulations may apply,” the paper notes.
“In the case of permission-less blockchains, network participants may be anonymous or pseudonymous, ie, their identities are not known fully. In such a scenario, policymakers and regulators are likely to face enforcement challenges in terms of identifying liable entities and penalising them for wrongful conduct.”
As major applications of blockchain will likely be in the finance domain, CCI is focused on the legal structures of such entities. The paper says that under the Indian law a blockchain can be potentially understood to be an “association of persons” for legal and tax classification, or may be treated as a partnership where “each partner would be held jointly responsible for all liabilities of the business and all personal assets of each partner are subject to seizure or lien by creditors”.
It, however, says that there is little possibility to hold someone accountable for data breach as data in blockchain is immutable, not erasable and held by multiple participants.
Given these concerns, it is unlikely that blockchain firms will be given a free hand to grow without first structuring the business under Indian laws. That said, government and private entities are being allowed to test blockchain in various applications.
Source of this Post – Business Standard
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