A panel created under the Ministry of Finance in India, whose main aim was to come up with a regulatory framework applicable to Cryptocurrencies like Bitcoin, has been said to be in the process of recommending for a government-backed Cryptocurrency instead.
Government To Develop Own Blockchain Network
According to a Quarts report, a senior official privy to the goings on in the inter-governmental panel has been quoted as saying that the panel will be suggesting the development of a government-backed crypto coin which will be based on a Blockchain network also developed by the government.
Going by the Quartz report, the senior government official said that the government was evaluating the possibility of developing a state-backed Cryptocurrency and Crypto token. The official also added that the government will be conducting an independent research on the development of a Blockchain network, a developing the network.
This report comes at a time when even the country’s central bank the RBI (Reserve Bank of India) is evaluating the possibility of developing a digital currency issued by the central bank.
Possibility Of A Central Bank Issued Cryptocurrency
Although the Reserve Bank of India has refuted reports that it has created an internal unit that is tasked with researching on Blockchain technology and Cryptocurrencies, it has affirmed that there is an internal group whose main purpose is to look into the feasibility of introducing a central bank issued digital currency dubbed the CBDC (central bank digital currency). This confirmation was made in the central bank’s annual report for the year 2017-2018.
The research arm of the RBI had earlier on in the year published a white paper drafted by the main banking research institute in the country plainly stating that from the research done the conclusion was that the underlying technology in Cryptocurrencies, the Blockchain technology, had already matured to a point that makes digitization of the country’s fiat currency possible. The Rupee is India’s official fiat currency.
in the event that the government develops and issues a digital currency through the central bank, the digital currency will have the same valuation as that of the Rupee.
Following Footsteps Of Venezuela
The first mention of the possibility of having a fiat Cryptocurrency was late last year. Sudharshan Sen, the executive director of the RBI, in September 2017 stated that the central bank had tasked an inter-departmental group with looking into fiat Cryptocurrencies. The senior RBI official added that the Cryptocurrency being looked into will be the equivalent of the Rupee.
It has also been reported that officials intend to name the Cryptocurrency the ‘Lakshmi’, who is the goddess of wealth and prosperity in the Hindu religion.
Should India be successful in its efforts to develop its own central bank issued Cryptocurrency, it will be following the footsteps of Venezuela which is set to launch the controversial Petro coin. As the first state Cryptocurrency in the world, the Petro has been advertised as being pegged on the nation’s vast oil reserves. Iran is also in the process of developing its own Cryptocurrency.