The European Central Bank (ECB) has no interest in collecting users’ payment data or monetising data. A digital Euro would allow to pay without sharing their data with the third parties, other than what is required under regulations.

The Euro zone is still some years away from the electronic version of the cash. However, it aims to curbing the data-mining power on private payment apps.

Electronic cash can be made available as blockchain tokens. Here there is no privacy concern. The user has to produce the correct cryptographic key to spend the credit in the smart wallet. It makes digital currency akin to physical cash or Bitcoin. The onus of safety for the money is entirely on the individuals. However, digital currency can start life as IOUs in central bank ledger. These are akin to deposits, rather than cash. Monetary authority may not have the bandwidth to verify the identity of the individuals. The job would be outsourced to banks. They would know who is paying whom. Here there is risk of losing anonymity of cash. This can be corrected by separating identity from transactions. For small value transactions, an alternative could be an off-ledger system, with no details revealed to any third party.

Electronic cash can resemble the real thing if purchasing power could be made to reside on a piece of hardware. This the users have to safeguard.

As we know, China is a front-runner to launch central-bank-backed-digital currency (CBDC). The European Central Bank too is contemplating to introduce electronic form of cash to complement bank notes and coins, though such a launch is still several years away. The European Central Bank does not expect the digital Sterling to replace the existing physical cash or bank accounts. The UK is still not sure about the introduction of digital currency.

British finance minister Rishi Sunak asked the Bank of England to study the central-bank-backed digital currency — Britcoin to address some of the challenges posed by cryptocurrencies such as Bitcoin. They will create a new task force between the Treasury and the Bank of England to coordinate exploratory on such currency.

Iceland, Sweden, Norway are the popular mining locations of Bitcoin. As we know, mining consumes a lot of computer power and consequently electric power. And these regions have abundance of electric power. China too mines Bitcoins, but relies on mainly thermal electricity.

In mining, computers process complex algorithms, and thus electricity is one key input. As the complexity of algorithms increase, more and more electricity is consumed. There are issues of carbon emissions. Iceland is the pioneer in green mining. Till recently, it mined 8 per cent of international Bitcoin production. The share has now dwindled to 2 per cent.

A Bitcoin can act as collateral to get a loan. One Bitcoin is worth Rs.4500000, and by pledging it one can get easily a loan to the extent of 50-70 percent, say Rs.30 lac. The intermediary bank are institutions such as EasyFi Network, Valud and Cashaa. Let us call them crypto banks. The loan is instant as creditworthiness is not to be assessed of the loan seeker. The loan is disbursed to a crypto account which uses stablecoins ( say USDT) pegged to the US dollar. These stablecoins which represent the loan amount can be exchanged on a crypto exchange to get the desired fiat money. Other than Bitcoin, Ethereum or Ripple can also be pledged. There is no fixed tenure to repay the loan, and there are no foreclosure charges.

Semiconductor fabrication plants or fabs are a strategic industry. Many foreign governments fund the fab plants. In the past India’s dream of fab manufacturing could not come true twice. India is trying third time to set up fab manufacturing. India is trying to rope in foreign players such as Intel, TSMC, Samsung, Infineon, Texas Instruments, STMicroelectronics and many others. The Government’s empowered committee of ministers is examining the proposal. Global players are interested in specialty fabs — wafers made of gallium nitride or silicon carbide used in multiple applications. The specialty fab plant needs a capital investment of $150-250 million as against a minimum of $4 billion for an integrated plant. Here the wafer size is 6-8 inches, as compared to a 12 plus inch size of a logic chip. However, even this will take 12 years to break even. It, therefore, requires financial support from the government at least to the extent of 50 percent.

It is desirable that an Indian consortium aquires or takes over an existing plant abroad and learn the tricks of the trade. Later the plant can be relocated to India.

Even some big fab manufacturers can be invited to set up plant in India. However. there is no manufacturing base here in India, and it is risky to invest $2 billion-$8 billion here.

India has a base of chip design, and has R&D centres. What it lacks is a huge domestic market, such as US.

It all depends upon the investment policy of the government. There should be fiscal incentives. These incentives should be exclusively for the fab manufacturing. They are not to be shared with display fab players, IoTs, and wearable device players.

Apart from capital investment, fab manufacturing demands commercial acumen. India lacks here too. A fab unit has to run at high capacity or else it could be a flop.

Coinbase Inc., the largest cryptocurrency exchange, which is currently valued at $68 billion has decided to go public with a direct listing on the Nasdaq stock index on April 14, 2021. Coinbase is poised to become the most valuable cryptocurrency exchange in the world. Coinbase operates in the US, a country with significant regulatory hurdles.

Policy makers should support the legitimate aspects of cryptocurrency and financial technology. They should curb their excesses and abuses. These should be merit-based decisions.

The listing is launched directly to investors, instead of through a traditional IPO. In direct listing no shares are sold ahead of the debut and the company lists directly on the Exchange.

The company is valued around $68 billion this year (2021). It represents the latest breakthrough for acceptance of cryptocurrencies as an asset class.

Very large Integration talent consists of creating an integrated circuit (IC) by putting together millions of transistors on a single chip. Different applications require different chips. India educates excellent chip designers, but either they work abroad or in the R&D centres of MNCs. They offer good emoluments and working conditions, and the startups cannot match these. Indian educational institutes cannot afford the VLSI faculty talents. They are always short of such faculty. India needs some 5 lac VLSI trained manpower, and we have just 50 percent of it. The government is funding institutes to get the tools needed for chip design, to provide training on these tools, to organise faculty workshops. One can design a chip, But what is crucial is to put it on silicon and test it. Many institutes cannot afford the silicon implementation cost. It costs Rs. 2-3 lac to get a chip fabricated.

And there are no testing facilities except in the IITs. Large semiconductor organisations should partner with the academia.

It is necessary to have undergrad programmes of BTech in electronics and VLSI. The curriculum should be updated to accommodate advanced topics. The basics should be shifted to matric and higher secondary level. Industry experts too should be roped in to teach the students to make them industry-ready when they pass out. Industry professionals are not easily available. Their jobs have deadlines and they lack time. Good VLSI education should become as common as IT education.