K’taka To Assess Bharat Web3 Association’s Proposal To Set Up Regulatory Sandbox: IT Minister

The Karnataka government will assess the proposal of industry body Bharat Web3 Association to set up a regulatory sandbox for web3, the state’s IT and BT minister Priyank Kharge said on Thursday (October 19).

Addressing an event in Bengaluru, Kharge said, “I would like to assure that the suggestion put forth by Bharat Web3 regarding the regulatory sandbox can certainly be evaluated.” 

Bharat Web3 Association, the apex body for web3 companies in India, has presented a number of suggestions to the Karnataka government for the development of web3 in the state, including establishment of the sandbox.

Regarding the other suggestions, the minister said that initiatives such as education and awareness programs, pilot projects, and thought leadership can be implemented and do not require government funding. As such, these proposals are deemed approved.

“We need responsible innovation in the sector with public use cases,” he added.

Kharge also said that the Karnataka Innovation Authority will be overhauled as it needs substantial transformation to transition to web3 from web2. The move will benefit the web3 sector, he added.

The Karnataka Innovation Authority is an agency of the state government established to promote innovation. Its primary function is to create regulatory sandboxes for development of new technologies. 

Web3 For Transparency 

Talking about the importance of the regulatory sandbox, Bharat Web3 Association chairman  Dilip Chenoy said it helps in solving regulatory challenges by collaborating with the state government.

Giving the example of tokenisation of real estate for fractional ownership, Chenoy said there is no barrier from central laws in doing so but the state laws are a challenge. The regulatory sandbox will help companies in overcoming such challenges.

The chairman also highlighted the importance of web3 for bringing transparency in government schemes. Citing a scheme of the Singapore government, Chenoy said web3 allows grants provided by the government in the form of digital currency for specific purchases from designated stores to be used only for it, thus preventing misuse.

The industry body, he said, is working with the Telangana government for transfer of funds to women and tokenisation of real estate under a regulatory sandbox framework.

Bharat Web3 Association is also working with the Maharashtra and Rajasthan governments to set up regulatory sandboxes, which can be utilised for bringing transparency in government schemes and auditing them.

The association, which counts CoinSwtich Kuber, Polygon, among others, as its founding members, was formed last year, a few months after the Internet and Mobile Association of India (IAMAI) dismantled the Blockchain and Crypto Assets Council (BACC).