The central government of India is weighing with a proposal of introducing its own cryptocurrency much in the line with Bitcoin. Sources close to the government said that a committee of government officials discussed the proposal and they found it quite useful to set up and run blockchain for the financial services.
If the decision is taken to introduce cryptocurrencies in the Indian financial market, it is the domain of RBI (Reserve Bank of India) that will regulate and amend the Acts such as the Currency Act.
Sources close to the Ministry of Finance said the name of the government’s new cryptocurrency would be ‘Lakshmi’.
The partner of Nishith Desai Associates, Vaibhav Parikh said: “I won’t be surprised if the government comes up with its own cryptocurrency because banks are trying blockchain as a technology and to make blockchain work it would need some cryptocurrency”.
“Since it doesn’t trust Bitcoins it may come up with their own currency.”
Indian Government hesitating to Legalize Cryptocurrency
The RBI, in March 2017, issued a statement where they were critical against the use of encrypted money such as Bitcoin. The Central Bank has also issued warnings to the holders, users, and traders of security concerning Bitcoin and other cryptocurrencies.
After a month, Finance Ministry made an announcement regarding forming of the special committee that is suggestive of measures to minimize vulnerabilities and security breaches in relation to the cyrptocurrencies.
It was reported in June that government is moving closer to legalizing virtual currencies. However in July, the government mulled over the KYC norms implementation in ensuring cryptocurrencies’ safe transactions.
Cryptocurrencies in India Continue To Thrive
According to an app-based Bitcoin exchange, Zebpay, India has five lakh Bitcoin downloads on the Android operating system with the addition of over 2,500 users daily. Several startups, in the last few years, have come up in the cryptocurrency space such as, Unocoin, Coinsecure, and Zebpay. There has been an increase in the funding opportunities from the previous year.
In August 2017, BitBay, the international Bitcoin exchange, has begun their India operation. BitBay is headquartered in Poland, which started sourcing for local IT talent for their product development. This move enables the first international Bitcoin trading platform entering India.
In 2016, the Bitcoin startup Unocoin, based in Bangalore, has been funded by Blume Ventures, Mumbai Angels to the tune of $1.5 million. Coinsecure, another Bitcoin trading platform, secured $1.2 Mn from an undisclosed investor.