‘Volatility, anonymity pose risks to financial integrity’: IFSCA chief on cautious blockchain approach

Drawing a distinction between blockchain technology and crypto assets, Rajaraman said cryptocurrencies had not been permitted within the GIFT International Financial Services Centre ecosystem. “We have not allowed cryptocurrencies into the GIFT-IFSC ecosystem due to concerns around anti-money laundering, counter-terror financing and financial instability,” he said. He added that volatility and anonymity posed risks to financial integrity and national security.

Blockchain has moved beyond speculation to become part of global financial infrastructure. But decentralisation also raises governance challenges, as Rajaraman cautioned. “In traditional finance, there is a clear chain of responsibility when things go wrong. In a fully decentralised network, that safety net disappears,” he said. “A system without a defined point of responsibility may be resilient in operation, but fragile in governance.”

Rajaraman also flagged legal and evidentiary hurdles in integrating blockchain into existing frameworks. “Many jurisdictions, including India, require electronic evidence to be certified by a person in charge, which is practically incompatible with decentralised, permissionless blockchains that have no central authority,” he said. He added that issues of cross-border jurisdiction, immutable records, and the admissibility of blockchain-based evidence in courts remain unresolved. Regulatory sandboxes, he said, were therefore being used to test “limited, well-defined use cases”, including the tokenisation of real-world assets, before any broader deployment.

The three-day forum organised by RRU’s School of Applied Sciences, Engineering and Technology in collaboration with the University of Zurich, brings together regulators, academics, and industry experts from India and Switzerland to examine blockchain’s role in finance, governance, and security.

RRU Vice-Chancellor Bimal N Patel said the university aims to position itself as a platform where policy, technology and national security intersect. “Blockchain is increasingly becoming part of the DNA of global financial infrastructure,” he said. He added that the challenge for institutions like RRU was to ensure innovation strengthens economic and internal security rather than undermining it.

Bringing forth the bilateral dimension of the forum, Lena Robra, Head of Swissnex India, said that the research-led collaboration between India and Switzerland would be critical as trust becomes central to digital systems. “Trust will become one of the most important currencies,” she said.

(Nishant Bal is an intern at the Ahmedabad office of The Indian Express)