The Indian government is reportedly considering introducing its own digital cryptocurrency, similar to bitcoin. With the rising popularity of bitcoin in all financial markets, the government is now looking at a government-issued digital currency. India’s central bank believes that digital currencies are susceptible to misuse, and hence chose to issue one themselves. This cryptocurrency will fall under the domain of the Reserve Bank of India (RBI).
According to Business Standard, the cryptocurrency will be code-named ‘Lakshmi’ — after the Goddess of wealth. If introduced, Lakshmi should run on an implementation of the blockchain technology used by Bitcoin itself. Off late, India has been pushing the digital payments agenda rather strongly. As a part of the government’s cashless initiative, there has been ‘notable growth’ in the bitcoin market in India. Since then banks have been trying to make blockchain work, and for that, it would need some cryptocurrency: Lakshmi.
The RBI believes that cryptocurrencies pose potential financial and legal customer protection and security related risks. The recent cyber attacks “ransomware” hackers encrypted the victim’s data and demanded that they send payment in bitcoin in order to regain access to their computers.
We must know that bitcoins are a currency because people choose to accept them as a medium for exchange for any kinds of goods and services. Cross-border money transfers and dark web notoriety do make governments jittery, but cryptocurrencies are working very well for people who want anonymity, something which no fiat currency can offer.
Despite RBI cautioning users on cryptocurrencies, India is seeing some rapid expansion on bitcoin users — it has over 5,00,000 bitcoin wallet users and the Indian Government did mull over the implementation of Know your Customer (KYC) norms to ensure safe transactions of cryptocurrencies.
Progress on Lakshmi
Apart from a nod by the RBI, the State Bank of India has also taken the initiative to bring lenders and tech companies together for using Blockchain technology to share information among banks. This should eventually prevent frauds and tackle bad loans which are almost one-fifth of the bank’s loan book. This has been given the name “Bankchain” and is in partnership with IBM, Microsoft, Skylark, KPMG and 10 other commercial banks.
The Bitcoin Impact
Thanks to the unrelenting popularity of bitcoins, Unocoin is trying to make payments in cryptocurrency mainstream. With a number of startups that have opened Bitcoin wallets in India, it isn’t hard to estimate the impact bitcoin has had on a global scale. Despite the fact that dealing in cryptocurrency is still nascent, more people are taking an active interest in it every day. Cryptocurrencies have led to the emergence of new markets which are controlled by no one. The masses themselves will rise up as the managing body and will handle and maintain such innovative markets. This has probably led the Indian government to sit up and take some interest in fiat-cryptocurrencies.
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