While working on creating a legal framework for bitcoin and other digital currencies, the Indian government is now considering launching its own bitcoin-like cryptocurrency. The proposed government cryptocurrency is to be issued by the Reserve Bank of India (RBI).
Indian Government’s Fiat Cryptocurrency
The Indian government is considering “a proposal to introduce its cryptocurrency similar to bitcoin,” reported Business Standard on Saturday. This state-run cryptocurrency will be called “Lakshmi,” the name of the Hindu goddess of wealth, fortune, and prosperity. According to sources close to the development:
The proposal was discussed by a committee of government officials…Whenever the decision is taken, the cryptocurrency will fall in the domain of the Reserve Bank of India (RBI) and some Acts such as the Currency Act might have to be amended. Hence, this will be a time-consuming process.
This news follows a speech on cryptocurrencies by RBI Executive Director Sudarshan Sen at the India Fintech Day conference. He hinted at the time that the government may be introducing its own fiat cryptocurrency which will be issued by the RBI. “Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian rupee, so to speak. We are looking at that closely,” he said. In addition, he stressed that the central bank is not comfortable with non-fiat cryptocurrencies such as bitcoin.
Cryptocurrency Regulation in the Works
Meanwhile, the Indian government has been working on creating a legal framework for bitcoin and other digital currencies. Last week, Money Control reported that “the government is going to prepare a framework for bitcoin soon.”
In April, the same government set up a committee to investigate bitcoin. Last month,Money Controlalso reported that the committee has submitted its report to the government. It recommended “strict monitoring” of digital currencies, the news outlet detailed, adding that “there is no possibility of immediate restriction,” but the government is also not in favor of promoting them.
The committee has additionally recommended a task force be created comprising of officers from the RBI, the Securities and Exchange Board of India (SEBI), the Income Tax Department, the Central Board of Excise and Customs (CBEC) and the Financial Intelligence Unit. The latter would then monitor the abuse of digital currencies, the news outlet noted.