By Medha Bhagwat, @bhagwat_medha, (INN) :
One of the world’s fastest developing economies, India has seen a surge in both the awareness and also the adoption of Cryptographic forms of money i.e. Cryptocurrency especially since the dubious demonetisation initiative in November 2016, which viably observed 86% of the nation’s physical banknotes rendered old overnight. In 2013, the Reserve Bank of India had cautioned people in general against the utilization of such Virtual monetary forms.
This was after the central bank observed a rising interest for bitcoin, which it saw as risky as it was inclined to theft and had no intrinsic or underlying value, in light of the fact that regardless of how secure and legitimate uses the payment system bitcoin may have, yet like other technologies it’s additionally been demonstrated useful to cybercriminals looking for better approaches to extort money. In any case the announcement made by the RBI additionally demonstrated that the institution would examine issues with respect to the virtual currency.
These announcements were additionally compounded earlier in August, this year when the Indian Finance Minister Arun Jaitley – the highest financial authority in the nation – conceded that the bitcoin market has indeed demonstrated “exceptional growth” in the parliamentary session, the minister’s words were sufficient to drum up a buzz.
However there is no denying the fact that bitcoin’s popularity in India has grown quite a lot after demonetisation took its toll on the country at the time of its announcement in November, the price of one bitcoin in India was $757. It was lingering between $866 and $896 during the early days of demonetisation, and then it suddenly escalated to $1.020, 18 days after Prime Minister Narendra Modi made the official announcement on November 8, 2016 and surprisingly the bitcoin was valued around $770 in the U.S the same day.
Therefore on 12th of April of this current year, the Indian government announced that they have assembled a council to implement bitcoin regulation. Comprising of the central bank itself, and a few finance related institutions – government organizations and commercial banks, the committee created a deadline to come up with the final report in 3 months time.
The committee soon opened itself to citizens from suggestions and recommendations concerning the control and legality of virtual currency. As just this week, while the cryptocurrency market capital has hit the $200 Bn mark, basically led by Bitcoins which represents $120 Bn, the “bubble”, as called by many, has gotten and is still getting more stronger with each passing day.
The government’s “Cashless India” initiative has also led to the RBI researching fiat cryptocurrencies to develop a digitized version of the rupee, India’s fiat currency. Other countries/cities like Russia and Dubai have already done so and by embracing bitcoin too are seeking to set some kind of regulations.
In India, with no official declaration yet, the government has gone in stealth mode. On one hand the RBI says that it may launch its own particular digital money (cryptocurrency), while then again, the administration board is as yet unyielding on banning the whole Cryptographic money operations. Given that Bitcoin is the most mainstream cryptographic money, the bitcoin regulation would be the best method for monitoring digital money.
Yet the report by the interdisciplinary committee set up by the Indian Government is indeed considered, a step in the direction of bitcoin regulation in India, no matter how strict regulations it suggests.