A panel constituted by finance ministry suggested that India is thinking about drawing out its own government-backed cryptocurrency. The RBI plans to name its digital currency Lakshmi, after the Hindu goddess of wealth. This will be an addition to the paper currency and will reduce the expense of printing of notes.
“We are evaluating the government-backed cryptocurrency and crypto-token. Also, we are looking to develop and encourage our own research and development of blockchain technology,” said a senior government official privy to the discussions of the panel.
If the currency will not be government approved, then it could be a punishable offense. The panel is discussing the amendment of the Currency Act for this law.
An official says that if government-backed currency comes into existence then the features of the technology will become meaningless. The technology offers decentralized records, and if the government or the RBI is attempting to control it, at that point it loses its significance.
Other cryptocurrencies are also in danger of being of being boycotted as government-backed digital coins will take over.
RBI has descended vigorously on bitcoin and its kind nearly choking the ecosystem. The central bank issued the crypto ban on 6th July in India. The law stated that all the banks and financial institutes will not be allowed to maintain any relation with crypto exchanges and traders.
The circumstance is grim to the point that Zebpay, one of India’s biggest digital currency trades, winded up a month ago. As reported by Business Today, The move was five months after the crypto ban. The coins/tokens were credited back to the Zebpay wallet which continued its activities even after the closure of the company. New orders are not accepted anymore and unexecuted crypto-to-crypto orders were canceled by the company.
According to Quartz India report, it is clear that the Indian government is not comfortable with the idea of virtual currencies. The legislature has likewise shown worries that these currency forms might be utilized to launder money or trick investors. Thus it is seeking control.
However, government-backed cryptocurrency is not shocking. Venezuela, the world’s second-largest crude oil producer has made a debut by launching Petro. This digital currency is controlled by the Venezuelan government. Its price is equivalent to a barrel of oil.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]