Anonymous state officials within the Indian government say the country plans to issue a national cryptocurrency. This move comes amidst efforts by the apex bank to stifle virtual currency trading in the country.
India Looking to Launch National Cryptocurrency
According to Quartz India, the Indian government is seriously considering the launch of a state-issued digital currency. A top government official with confidential knowledge of such plans said:
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.
If the country goes through with the plan, then it would be following in the footsteps of Venezuela. The South American nation issued the Petro – an oil-backed national digital currency – earlier in the year.
Reports indicate that the Reserve Bank of India (the country’s central bank) might name the digital token after the Hindu goddess of wealth, “Lakshmi.” Recently, Live Bitcoin News reported that Iran was getting set to issue its national virtual currency.
The Death Knell for Bitcoin in India?
Given RBI’s aversion to cryptocurrencies, a state-issued digital token could spell doom for the already stifled local virtual currency market. Commenting on the likely ramifications of a state-issued digital currency in India, an anonymous government official said:
The panel is also discussing amendment of the Currency Act to make possession of any cryptocurrency, not approved by the government, a punishable offense.
The panel referred to here is the one set up last year to examine modalities for regulating cryptocurrencies in India. Recently, government officials have been in consultation with digital currency stakeholders to devise strategies for creating a national cryptocurrency.
The major criticism raised by cryptocurrency stakeholders to the proposed national cryptocurrency is the centralized nature of such a virtual currency. According to them, it defeats the entire essence of digital currencies in the first place.
RBI Ban Continues to Bite Hard
Against the backdrop of these deliberations lies the ongoing RBI ban which prohibits banks from servicing cryptocurrency exchange platforms. Despite multiple attempts to challenge the legality of the ban, the decision is yet to be overturned.
In mid-September, the Supreme court failed to conclude on the matter, adjourning the case. Meanwhile, cryptocurrency business in the country continues to suffer, with Zebpay, one of the largest crypto bourses in India, shutting down its operations in September.
Do you think India’s anti-Bitcoin stance has been a strategy to stifle the country’s cryptocurrency market in preparation for the introduction of a government-issued virtual currency? Let us know your thoughts in the comment section below.
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