Strong Policy Makers Are The Need Of The Hour For Web 3, Say Experts

Contribution by all stakeholders and strong policy making is the need of the hour for Web 3. This was stated by experts at a panel discussion on “Timely policymaking in cementing India’s leadership in Web 3.0 innovation,” organised as part of the BW Businessworld Web 3.0 Summit and Awards 2023.  

As the session chair, Dilip Chenoy, Chairman, Bharat Web3 Association, said, “Web 3.0 has the potential to generate a one trillion dollar economic wealth for the country by decentralising the wealth, as it allows monetisation of the content. It offers tremendous opportunities to do things differently. But for this what is needed is a very interesting governance framework and policy making.”  

A Damodaran, Distinguished Professor, ICRIER, shared what the stakeholders need to look for while talking about Web 3.0. “Let me put myself in the shoes of a policymaker. I look at the positives and the negatives and see a balance between the two. Web 3.0 is a global issue like climate change and biodiversity. Web 3.0 would be driven by cryptographic productive virtual assets. It is run by decentralised communities, which is the philosophy of Web 3.0. It has to be seen what happens to GDP, job market and labour market. Negatives are well-known. They are macroeconomic issues. Sustainability is also an issue. If you just look at negatives, you will have a policy with no impact,” Damodaran said.  

Manish Agarwal, Founder & Custodian, IndiGG DAO, spoke about the challenges for Web 3.0. “If you look at the premise, the starting point is that you have to look at a global state and decentralisation. The challenges would be about controls and how much to let it go. With the global boundaries being dissolved, this is an issue which every government is grappling with. I run a gaming company and I see parents of 16-year-olds stopping their children from playing bitcoin-based games. The fear is in the mind, not legal and that is where a positive narrative needs to come.”  

Meghna Bal, Fellow & Head – Research, Esya Centre, spoke about the legalities around Web 3.0. “We recently did a study to understand the advanced and emerging market technologies. In most countries under G20, this is legal. Only China has officially banned it. There is a higher degree of licensing in advanced economies. While it is legalised in most countries, there are restrictions too, which include financial restrictions, on specifics like ICOs. The point is that there are several restrictions based on privacy points," Bal said.

Bal stated that when it comes to worldwide agreement, there are two primary concerns: taxation and money laundering. She pointed out that the implementation of a new tax regime led to offshoring amounting to Rs 32,000 crore. Consequently, it is crucial to take this into account, as harsh regulations could potentially trigger different types of risks, such as increased offshoring and the movement of funds overseas using untraceable assets.

Kaushal Mahan, Vice President, Chase India, shared his views on how the structures for Web 3.0 should be. “We need to move out from traditional regulatory structures to optimum structures. How can we do it? We need to look for a hub and spoke model, which we have been suggesting. The nodal agency is looking at the high risks associated with Web 3.0 and also looking at the existing resolutions. How do you encourage innovations - by helping startups and generating more funds," Mahan said. 

"Existing regulations are already there like the consumer protection act, we also have a digital India bill coming soon. So why can’t we look at classifying Web 3 based on the use cases. A new cyber policy is also expected soon. Do we need to put up a curtail again or effectively use the existing framework. This is happening in other domains too. We saw people from TRAI looking at emerging business models. We need to reach out to government stakeholders and push for adoption of Web 3.0,” Mahan added.