As cryptocurrencies continue to be purchased with official country-regulated currencies like the American dollar, Euro, Yen, Rupee and just about every other currency you can name–it’s no surprise that countries are looking to reclaim the market that residents are increasingly trading-away from in favor of cryptocurrency alternatives.
Recent reports out of India have brought to light the fact that the Indian Central government is toying with the idea of implementing their own blockchain-based currency called “Lakshmi,” and that the topic has been debated among officials internally within the Indian government. However, questions about if the RBI (Reserve Bank of India) will regulate the currency, and if amendments to the Indian Currency Act will be a prerequisite for moving forward with the proposals are yet to be addressed.
Regardless, India’s seeming intent to move towards implementing a blockchain-based currency is far from shocking. The Indian government have voiced their displeasure towards the popularity of Bitcoin in the past, and this could very well be their best attempt to catch-up to a rapidly changing consumer market that seems to be increasingly leaving the Rupee behind.
India’s motive here is especially easy to understand when you consider how popular currencies like Bitcoin have become in India over the past few months. In today’s climate, thousands of Indian residents exchange Bitcoins on a day-to-day basis.
In fact, it’s gotten to a point where brief dips can be seen in the value of India’s currency and many have been quick to conclude that the increasing success of Bitcoin in India is a contributing factor. It is believed that one of the most commonly used currencies to purchase Bitcoin is now the Indian Rupee.
Interestingly enough, India is not the first country to consider implementing their own state-backed currency. Earlier in 2017, Estonia announced their intention to create the world’s first state-backed currency.
Unfortunately, the European Central Bank ensured that Estonia would not be able to implement their cryptocurrency idea, since Estonia is bound to eurozone regulations that prevent the implementation of a new currency by any of its member states.
India is under no such obligation, although their are still many factors inhibiting India’s proposal. As critics have pointed out, a large contributor to the success of cryptocurrencies is the fact that they are, by nature, not regulated. By allowing purchasers and traders to remain anonymous, currencies like Bitcoin allow for the easier exchange of goods and services without the risk of negative government oversight. This is especially true for countries with less-than-stellar records of human rights violations and shockingly-high rates of government surveillance
In fact, this could be the very reason that currencies like Bitcoin have been so successful in India to begin with. India has a history of extreme surveillance and strict currency control which are undoubtedly factors that have made untraceable currency spending through cryptocurrencies so desireable for people within the country. In this sense, a cryptocurrency that is regulated by the government and subject to governmental oversight would be a step in the wrong direction.
Proponents of India’s plans, on the other hand, have pointed out that the very fact that governments are looking to create and support their own cryptocurrencies is a sign of the staying power that these new economic alternatives hold, and that these kind of government-actions will only serve to legitimize cryptocurrencies in the mind of the average on-the-fence consumer.
Ultimately, it is yet to be seen if India will move to begin implementation of a government-backed cryptocurrency, or what the process will look like going forward. If nothing else, simply the fact that India has joined the company of other countries in considering joining the blockchain bandwagon means that these new currencies are here to stay, and that big changes are coming to the global financial market as a result.
This article was written by one of our guest writers
Author: Jack Filiba – Read more from Jack here
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