When a government decides to crack down on an emerging technology or industry, it’s natural that the players in the field will start looking elsewhere.
In India, when the government and central bank made the decision last month to restrict crypto-currency trading and slap a negative label on it, all associated industries were affected. These include blockchain developers and coders, service providers, exchanges, mining operations and other businesses. Indian tech site, FactorDaily has compared the resulting brain drain and exodus to the one that followed the dot-com boom-bust in the early 2000s.
An analyst at UK-based Outlier Ventures, Joel John, told FactorDaily that “talented people and companies” from the blockchain space are already moving out of India and are finding work. “There are enough countries out there who realize the importance and want to take a lead in the blockchain ecosystem,” he said.
This seems to be the start of a trend whereby products can still be operational in India but the company is registered overseas to avoid local restrictions. John said: “Companies moving abroad is not a new trend but the regulatory complexities faced by blockchain companies have accelerated it. They can easily fly down to a Malta, Singapore or a Cayman Island, set up the company and start working on their product.” It is better, said John, “to lead a technology wave than play catch up.”
For Indian initial-coin-offering (ICO) projects, a number of high potential destinations are emerging. These include Singapore, Switzerland, the UK, Japan and Estonia, the latter being the current favorite due to ease of doing business and crypto-friendliness at the moment.
Estonia launched its e-residency program in December 2014, which made it easy to register a company. Representatives of the initiative have been holding sessions in India to attract entrepreneurs there. Its goal is 200 registered Indian startups and blockchain companies are currently at the head of the queue.
India is not alone in its negative outlook towards the crypto industry. A similar migration is likely to occur from Thailand when the government’s heavy taxation policy is introduced.
If crypto-currencies do become the future of finance – and that still is a big “if” – the countries that have embraced them now could end up the long-term winners.
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