With Bitcoin making waves all over the world in the past few months, the government was expected to provide clarity on cryptocurrencies. Finance Minister Arun Jaitley has said in his Budget speech that the currency is illegal and the government was not going to to recognise it.
The rising craze for bitcoin, a cryptocurrency that has rocketed to shocking highs, has already come under the government’s lens. Bitcoin can be an easy way to evade tax or snare unsuspecting small investors in ponzi schemes. The government has already begun a crackdown on illegal uses of this unregulated virtual currency.
However, Jaitley has announced that the government would adopt blockchain, the technology that supports cryptocurrencies.
The Reserve Bank of India (RBI) is already looking at the brave new world of cryptocurrency. The success of Bitcoin may have encouraged the central bank to consider its own cryptocurrency since it is not comfortable with this non-fiat cryptocurrency.
A group of experts at RBI is examining the possibility of a fiat cryptocurrency which would become an alternative to the Indian rupee for digital transactions.
RBI’s cryptocurrency could be a part of creating its own Blockchain, a distributed digital ledger and technology that supports cryptocurrencies. State Bank of India has taken the lead in bringing lenders and tech companies together for using Blockchain technology to share information among banks which will eventually help prevent frauds and tackle bad loans which are almost one-fifth of banks’ loan book.
The SBI’s initiative, christened Bankchain, is in partnership with IBM, Microsoft, Skylark, ..