India, with its pluralism and concerns for inclusive global development, should use this role to shape the future of Web3, avoid any digital colonialism or authoritarianism.
The Internet - both Web1 and Web2, were primarily Western world-led platforms. The social and even political narratives in the past few years have been shaped by those platforms. The then-India did not have the requisite global-political / policy heft or the consumption might, to be involved in the Internet Governance and the global Internet platformisation possibilities. In these three decades, India has come a long way from being body shoppers to a country with vibrant entrepreneurial energy and ideas, and proven low-cost high-impact digital public infrastructure.
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Now, Web3, is being shaped by the global developer community, on the ideology of the decentralisation of the Internet. Possibly, the BigTech platforms can be disintermediated and might have decreased influence, as the content creators will have power over their content. This is something that governments might like.
India on Thursday assumed the G20 Presidency for one year. The Group of Twenty (G20) is an intergovernmental forum comprising the European Union (EU) and 19 countries, including America, Germany, Australia. Its membership represents more than 60 percent of the global population, 75 percent of international trade, and 80 percent of the world’s GDP.
Over the next 12 months, India will host over 200 G20 meetings across the country. India has announced its intent to work with other G20 nations in bridging the digital divide. Hon'ble Prime Minister Modi said; “The principle of 'data for development' will be an integral part of the overall theme of our Presidency– One Earth, One Family, One Future (Vasudhaiva Kutumbakam). The digital transformation should not be confined to a small part of the human race and its greater benefits will be realised only when digital access becomes truly inclusive.”
Amongst the many agenda items, a crucial one that India is expected to start conversations on is crypto regulation and the future of the digital asset industry. India has been pushing for global cooperation and collaboration to decide the future of cryptocurrencies. India has also voiced concerns regarding the threat these assets present to global financial stability, and is working on coming up with its stance on the legality of cryptocurrency so as to become Financial Action Task Force (FATF) compliant. Even in the recent IMF meet, India had urged it to discuss cryptocurrency & other digital asset regulation.
This is where we need to move away from the trust deficit of seeing cryptos as the face of Web3. It is not. Web3 is much larger than that. It could bring in far greater benefits with decentralised finance, and to bring content rights back to the users. Much of digital public goods framework could see personalisation and customisation, with greater privacy protection if governments get their heads around Web3 framework and governance discussions.
India would need to steer ideas across a few important strong blocs - the US, China, EU for any web3 debate, as each of these blocs would push for their own comfort. This policy-charm-offensive would need strong and adequate political attention. India during the next 12 months of its presidency has the chance to get its views across. Its political system might not have the luxury of time for these global conversations in the runup to the 2024 national elections. Hence it is critical that India uses its G20 presidency effectively in the next 12 months.
Worries about Web3
The governments, world over, have had a mix of rightful concerns, as well as worries that emerge from fear of ‘losing political control’. The issues of a safe society that plague the policymakers include intrusiveness of emerging digital technologies that could test the sovereignty of the State, consumer data misuse, privacy issues, spreading of false narratives and any bias in the algorithms that could influence unfair means. Policymakers usually have the same set of worries: Will their control over the entities reduce? Will the entities cause any national security or systemic risks? Will it reduce consumer protection capabilities?
We have seen from history that every disruptive technology has brought in positives for societal application and economic activity growth as well as negatives along. In this digital era, the policymakers do not have the luxury of time for status quo-ism in forming policies around emerging technologies
Web3 is a nascent industry which will undoubtedly create employment, new markets, business models, and several other opportunities in the coming years.
According to estimates, Web 3.0 has the potential to contribute over $1 trillion to the Indian GDP by 2031. It is now home to more than 450 Web3 startups, which have raised $1.3 billion in funding in the last two years (until April 2022), NASSCOM reported in its study titled ‘The India Web3 Startup Landscape: An Emerging Technology Leadership Frontier’. Most of these startups are building in the decentralised finance (DeFi), NFT, and metaverse space, and employ about 75,000 professionals. India is also one of the leading adopters of DeFi in terms of value received on-chain ($88 billion in 2020-21). 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 productive with a median age of 35 years.
Policy formation for the 21st century Internet will not only be about stand-alone technology or plain consumerism, but also about the concept of global strategic affairs. Nations will have to leverage digital for their growth, and yet face the onslaught of faceless actors trying to hurt the very same growth. However the policy makers won’t have the chance to ponder much, as the global development of web3 products and solutions is moving with great speed.
An equitable and fair-access digital economy can be based on robust and dynamic regulations, social protections to distribute gains fairly, upskilling workers and entrepreneurs, and universal internet access. It also requires regional agreements to manage intellectual property, and cross-border information flows, regulate competition and taxation, and increase privacy. True to its global leadership, India should initiate a consensus-based framework for crypto regulation, and champion the cause of Web3.
India, with its peaceful intent for humanity, can add its weight in having safeguards against weaponisation of Web3 solutions. Same cannot be said of a few state actors or their sponsored platforms. India, with its pluralism and concerns for inclusive global development, should use this role to shape the future of Web3, avoid any digital colonialism or authoritarianism. Hopefully India will use its G20 Presidency to bring better access, right attitude, measurable accountability, and a bit of altruism to global Web3 policies under development.
--Srinath Sridharan is a Corporate Advisor and Leadership Coach
Read his previous articles here
(Edited by : CH Unnikrishnan)
First Published: Dec 2, 2022 7:44 AM IST