In January 2017, the Reserve Bank of India (RBI) released an internal circular that leaked to the press. This circular revealed that plans are underway for the Indian Rupee to be digitized to a national Cryptocurrency, the Lakshmi Coin. This is because the Blockchain technology has “matured enough” for the RBI to trust the integrity of the network.
In the third quarter of 2018, the same research arm of the RBI has been overhauled to effectively regulate digital assets, Cryptocurrencies, and the Artificial Intelligence that are regarded as emerging technology by the regulator. Analysts are predicting that this highly secretive process is following on a roadmap to unveil the Lakshmi, the proposed Indian national digital coin.
The Team’s Performance Is On Trial
The Economic Times reported that an inside source of the RBI confided that the arm of the bank has been tasked with a mandate to explore the Cryptocurrencies and Blockchain spectrum to see what is appropriate for the Indian economy. On the same note, the team is charged with creating policies that will guide the digital assets market transactions in the country of 1.2 billion people.
Later on, there will be a review to establish the performance of this team and to decide whether or not the team should continue operating on the same model.
The Lakshmi Is On The Agenda
One of the main agendas of the team is to ensure that the Lakshmi is established so that tests for its use can start. This idea was conceptualized by the RBI executive director and revealed to the media in late 2017. The Lakshmi name is derived from the Hindu goddess of wealth and prosperity. The RBI action was a tangible response to a white paper that was written by the RBI in support of the digitization of the Indian Rupee in January 2017.
The team will develop the Lakshmi coin for the Indian market and ensure that the Blockchain platform that hosts the coin is secure, efficient and has cutting-edge features that befit a national Cryptocurrency.
On the same perspective, the RBI has endorsed the creation of a Blockchain platform for commercial banking, registry services, and financial markets. Therefore, the RBI has some experience.
The RBI Is Softening Its Stance On Blockchain And Cryptocurrencies
The main concern has been about the tokenization of the DLT considering the fact that there is waning trust in Rupees in the public following a move by the government to withdraw the legal status of some Rupee note fiat money. This prompted the RBI to ban the use or transactions in Cryptocurrencies by all financial institutions in India.
Although the matter is being contested in court, Indian crypto investors are optimistic that government officials with a positive view of the cryptocurrencies will prevail on the RBI to revoke the ban.
The fact that the Reserve Bank of India has formed a team to regulate the crypto markets and has also embarked on a plan to develop the Lakshmi is a sign that the RBI believes a regulated environment is what India needs rather than a blanket ban.