Cryptocurrencies and Modi government have never been the best of friends, is it because it’s not Make in India?
RBI has decided to barr the banks and other financial institutions from dealing with any entities that deal with cryptocurrencies. The banks have been given a 3 month deadline to cease dealings with these entities.
It was announced in February that government was takin steps to make virtual currencies illegal, as high risks were associated with these somewhat volatile currencies. Even the finance minister, Mr. Arun Jaitley had announced in his budget speech that cryptocurrencies were illegal and will not be recognized by the government. But it’s quite funny that now that the ban has been announced, RBI has formed a panel to discuss about the feasibility of a virtual currency backed by the government.
Laksmi the Indian bitcoin
Government has surely clarified it’s motives by quoting that it will adopt blockchain, the technology that supports virtual currencies. The idea of bitcoin has made it clear that even a non-fiat currency (not supported by government) can actually work. So after june when the RBI panels submits it’s report, we could be seeing a new virtual currency which will be classified as a fiat currency (legal tender). According to the reports RBI will create its own blockchain to support the cryptocurrencies. SBI is already using the blockchain in association with the lenders and the tech companies to share information using the technology to reduce bank frauds and tackle bad loans.
The fraud angle
Cryptocurrencies have been under the fraud radar since last year when it was thought that they were being used for ponzi schemes and tax evasion purposes. Notices were sent to thousands of people dealing in cryptocurrencies by the tax department. This was done after the survey about the penetration and trade patterns of the cryptocurrencies.
Well, it’s too soon to say if Lakshmi will also be $12,000 but you never know Indians are the the most mysterious creatures on the planet. What will happen if and when Reliance launches a Jio coin, will the government ban Lakshmi and go with Jio like its happening in every other sector.