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India Plans to Launch Government-Backed Cryptocurrency

Amandeep Sonewane | Oct. 12, 2018
India Plans to Launch Government-Backed Cryptocurrency

According to sources, Indian government is 'evaluating' the possibility of issuing a state-backed cryptocurrency. 

12 October 2018- Despite making the best efforts to keep cryptocurrencies out of India, it looks like the Indian Government is still not ready to completely execute the cryptocurrencies. According to the latest announcement, India is planning to launch its own Government- backed cryptocurrency. 

A panel constituted by the finance minister of India might soon recommend launching a country’s own cryptocurrency. 

A senior government official in the discussions of the panel said that they are evaluating the government-backed cryptocurrency and crypto-token. Also, they are looking to develop and encourage research and development of blockchain technology

A Government-backed Digital Currency

The development comes at a time when the Central Bank of India has admitted to exploring a government-issued digital currency. 

Few sources report of an internal unit at the central bank dedicated to cryptocurrency and blockchain research have been disproved by the RBI. The central bank also confirmed the formation of an inter-department group which tasked to study the feasibility to introduce a central bank digital currency in the 2017-18 annual reports. 

Moreover, according to the reports, any state-backed cryptocurrency issued by the central bank will be valued as the digital equivalent to INR.  

On Sept 2017 the RBI executive director Sudharshan hinted “a fiat cryptocurrency”

He said: 

“Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian rupee, so to speak. We are looking at that closely.”

Moreover, officials have also discussed the possibility of naming the coin as “Lakshmi” – the Hindu goddess of prosperity and wealth. 

The country’s effort to develop the ‘Lakshmi Coin’ will follow the controversial crypto token ‘Petro.’ The coin which is backed by the country’s large oil reserve – the world’s first state-owned cryptocurrency. 

The government officials said: 

“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 panel is also discussing for the cryptocurrency acts to make possession of any digital currency which is not approved by the government. 

As the Reserve Bank of India, the government is not comfortable with the cryptocurrencies, even though it wants to push the blockchain technology. The Indian government has also expressed concerns that these currencies might be used for money laundering and speculating investors. Therefore, it is highly important to seek control over it.

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