Cryptocurrencies are a raging topic these days. A cryptocurrency is a virtual currency which is supposed to work as a medium of exchange. Encryption is used to regulate the generation of the units of the cryptocurrencies and also verify the transfer of funds.
In India, Bitcoins and other cryptocurrencies are in the news for the wrong reasons. Finance Minister Arun Jaitley in his Budget speech stated that the Government of India, will do everything to discontinue the use of cryptocurrencies in India. Arun Jaitley says cryptocurrencies are not legal tender in India.
In the midst of all this, there’s talk that the Modi Government is killing Bitcoins to launch its own currency called Lakshmi. What’s this all about?
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1. RBI has banned banks from dealing in Cryptocurrency
The RBI has barred banks and financial institutions from dealing with cryptocurrencies. RBI doesn’t allow you to buy cryptocurrencies from banks and mobile wallets.
RBI has banned banks/mobile wallets from dealing with or providing services to individuals/business entities, which are into buying and selling cryptocurrencies. According to RBI rules, you cannot transfer money from a bank account to a crypto-trading wallet.
See Also: Why Bitcoins Are Dangerous For You?
2. FM Arun Jaitley is interested in Blockchain
The Finance Minister has announced that the Government is very interested in Blockchain. This is the technology which supports cryptocurrencies. Banks see immense potential with Blockchain technology. This technology helps create an immutable, secure encrypted ledger.
Blockchain will not only help in accuracy and security of data for banking and financial services, it will also promote financial inclusion in India. Blockchain technology can help citizens to easily operate bank accounts, transfer money and get loans sanctioned, real fast.
See Also: Why Bitcoins Are Bad For India?
The Government had plans to launch its own cryptocurrency called Lakshmi last year. The RBI badly needs cryptocurrency, to cut down on the costs of making paper currency. This could make banking transactions very efficient. The new cryptocurrency will not replace the paper currency, but would function along with the banknotes. RBI would create its own blockchain, which is a distributed digital ledger, that supports crypto currencies.
So, why does RBI want to launch a cryptocurrency? A cryptocurrency has immense use for online banking transactions. The blockchain technology helps maintain the anonymity of online transactions.
Cash transactions are anonymous. Cryptocurrencies provide anonymity in online transactions just like cash, which cannot be done through credit card/debit card/internet banking-based payments. We are talking two birds with one stone.
Secure anonymous online transactions + an acceptance by the Government and RBI.
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