HomeNewsIndia evaluating creation of government-backed cryptocurrency

India evaluating creation of government-backed cryptocurrency

India

A review panel, created by India’s finance ministry, to determine a regulatory framework for cryptocurrencies in the country has suggested India launch its own cryptocurrency.

A report from Quartz suggests that officials are growing closer to preparing a regulatory framework for cryptocurrencies. One senior official suggested the panel is even looking into the creation of a state-sponsored cryptocurrency, according to the publication. This news follows on the heels of the UAE looking to create their own regulatory framework surrounding cryptocurrencies.

The official explained: “We are evaluating the government-backed cryptocurrency and crypto-token,” adding, “and we are looking to develop and encourage our own research and development of blockchain technology.”

Another executive, who requested to remain anonymous explained to Quartz: “If a virtual currency is going to be backed by the government then it goes against the whole grain of such coins. These are essentially decentralized ledgers, and if the government or the RBI is trying to control it, then it loses its meaning.”

The official added: “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 discussion comes amid a larger crackdown on cryptocurrencies in the country. Since July, the Reserve Bank of India (RBI) has been banned private banks from doing business with cryptocurrency exchanges.

This move led to the closure of India’s oldest and largest cryptocurrency exchange, ZebPay, in late September.  The closure, which came as a surprise to many of the exchange’s 3 million users, highlights the government’s position on the subject.

ZebPay cited banking issues for the closure, issuing an official statement which read: “The curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully. At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business.”

The cryptocurrency panel is expected to release a full report and outline the future cryptocurrency framework for the country by the end of 2018; although things are looking increasingly grim from decentralized initiatives in the world’s second largest country. Much to the dismay of those who see the potential of decentralized finance in India.

Photo Courtesy: Wikimedia Commons/Dennis Jarvis
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I am living in Mexico, new tech enthusiast, decentralization fan, cryptocurrency enthusiast, geopolitical junkie, digi-explorer, and music lover. I believe that we are on the cusp of a new frontier in how we will view the government, money and energy.

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