The Reserve Bank of India (RBI) has issued statements notifying that it is considering the possibility of launching India’s own digital currency. Cryptocurrency exchanges were banned in India by RBI around April 2018 on the grounds of money laundering risks; though RBI continues to stick to its decision to date, the formation of a sovereign digital currency is on its way, after quite a few internal discussions, an analysis was held.
RBI has always been disinclined to any private digital currency owing to the enormous money laundering risks. According to the governor of RBI, Shaktikanta Das, issuance of cryptocurrency being a sovereign mandate will not be allocated to any organization. Without disclosing any final date, he further mentioned that the technology is in its rudimentary stage and that its entry into the Indian market will take some time.
Impact of a Cryptocurrency Ban:
In July 2019, the Inter-Ministerial Committee (IMC) under the leadership of Subhash Chandra Garg, the secretary of Department of Economic Affairs (DEA), had produced its report on a ban on cryptocurrency in India to the finance ministry. Following which, the committee came up with the idea of allowing cryptocurrency issue only by the government and not by any private firms. Not only did IMC prohibited cryptocurrency, but it also had suggested a jail term of 1 to 10 years for people engaged in cryptocurrency exchanges.
As a consequence of this verdict, quite several cryptocurrency start-ups and other allied companies went out of work. Zebpay, Koinex, Coinome are some of the renowned companies that were heavily impacted and faced shut down. Another company, named Unocoin faced the brunt by laying off more than half of its staff.
However, this time, according to some news doing the rounds, India, along with other BRICS countries are considering to bring in their own cryptocurrencies to counter USD.
This news seemed to have surfaced right during a time when all the central banks are contending to launch sovereign digital currencies.
Venezuela, Dubai, France, Singapore, and Malaysia are some of the countries on their way to introduce government-handled digital currencies. Even China, last month, had declared the name of its digital currency, “Yuan.”
India, too, will soon be among those countries holding its very own digital currency.