In the middle of curtailing cryptocurrency exchanges, the Indian government is possibly on the verge of hitting another stroke over cryptocurrencies along with bitcoin by plausibly launching its state own crypto according to a senior official.
Recently, under India’s finance ministry a panel is set up to layout and propose regulations for cryptocurrencies like bitcoin and blockchain which reportedly instead recommended as an option of government-backed cryptocurrency on a blockchain developed by the government.
A senior govt. official aware to the discussions of the panel mentioned that “we are evaluating the government-backed cryptocurrency and crypto-token and we are looking to develop and encourage our own research and development of blockchain technology,” the official relayed, implying to the digitized infrastructure of cryptocurrencies.
During the evaluation process, the panel will converse about the existing draft bill on cryptocurrencies for new amendments. Notably, one of the proposals is to make any possession of cryptocurrency without the government’s approval consider a punishable offense.
A Possibility Of Central Bank Digital Currency
Last year in Dec. 2017, the development came when the set-up of finance ministry panel announced under the secretary, department of economic affairs, Subhash Chandra Garg, to advise on the assessment and the regulation of cryptocurrencies in the country. The panel is expected to present its report by the end of 2018 which is pending from July due to the clamped up nature of the government.
When in April The Reserve Bank of India (RBI) publicized its ban and forbiddance on offering banking services to any cryptocurrency users, subsequently, RBI revealed its intention of exploring ways to issue its own digital currency. Despite the government’s interest in launching its own crypto, the ban cracked down on July 6. Although the Supreme Court of India has received several petitions against the RBI’s decision, everything seemed in vain as of now.
Here not to ignore in early 2017, The RBI’s research force, published a comprehensive whitepaper and substantially brought out that blockchain technology had matured enough and prepared to enable the digitization of the rupee, India’s fiat currency.
As a matter of fact, in September 2017, when Sudharshan Sen, RBI executive director initially hinted at a fiat cryptocurrency he said: “Right now, we have a group of people who are looking at fiat cryptocurrencies.
Inline the senior central bank official cited, “something that is an alternative to the Indian rupee, so to speak. We are looking at that closely.
However, the speculations are consistently continued especially after the government controversial ban on denominations of physical cash to render 90% of India’s currency notes obsolete overnight in 2016 and the central Indian government has announced “Cashless India” initiative towards digital payments in the economy.
Although, the exceptional enforcement of demonetization run has given wings to money laundering issues in the country at a large scale.
If the plans of implementing a state-backed virtual currency by the government will come into effect then there could be a strong probability it might go against other cryptocurrencies.
The technology behind the digital token must be analyzed carefully as these are the decentralized ledgers, and if the government or the RBI is trying to control it, then it might lose its meaning due to lack of experience, wisdom, and knowledge. It would also lead to the controversial situation for the country like Venezuelan crypto token “Petro” introduced by the Venezuela President Nicolas Maduro, and is backed by the Venezuelan large oil reserves which are considered by many industry experts a stunt to befool the populace…