In fact, banning Bitcoin, the Indian authorities are considering the possibility of creating their own cryptocurrency. According to Quartz, an expert group under the Ministry of Finance may soon recommend to the government the launch of the national cryptocurrency Lakshmi.
A senior government official who participated in the panel discussions told:
“We are evaluating the government-backed cryptocurrency and crypto-token. And we are looking to develop and encourage our own research and development of blockchain technology”
The expert group was established by the Ministry of Finance in December 2017. It was headed by Subhash Chandra Garg. It was assumed that a team of experts will submit a final report by July, but later this event was postponed to the end of the year.
The preliminary plan developed by experts seems to coincide with the proposals that the Reserve Bank of India (RBI) had previously put forward. For its part, the Central Bank also created an expert group to study the profitability of potential government cryptocurrency.
It is known that the currency can receive the name “Lakshmi” in honor of the goddess of prosperity and fortune Lakshmi Devi popular in Hinduism. At the conference in April of this year, Deputy Director of RBI B.P. Kanungo stated:
State cryptocurrency will help for the existing paper currency. In addition, it will save on printing banknotes.
Meeting with representatives of cryptocurrency exchanges, officials tried to understand how the state cryptocurrency will work. One of them, on condition of anonymity, said:
If the virtual currency will enjoy the support of the government, then this model will contradict the fundamental principles of digital money. They work on decentralized registries. Control from the government or RBI deprives this phenomenon of meaning.
In addition, there are concerns that the launch of the national digital currency will be an incentive to permanently ban “free” cryptocurrencies in India.
The same official said that experts are discussing the possibility of changing the “Law on Currencies.” According to the new edition, the possession of any cryptocurrency not approved by the government will be considered a crime.
It is worth noting that India is consistently going to eradicate Bitcoin and its analogs. In July, the central bank prohibited local banks from doing business with cryptocurrency exchanges and traders. This measure has effective. Representatives of trading platforms told Quartz that if a year ago the influx of new customers was 300,000 per month, now this figure has dropped to 1,500-3,000 people. Since April of this year, the exchange has been suing the central bank. In May, the Supreme Court took up this issue but has not made a decision yet.