Market Watch: India and blockchain
Plans for a fiat-cryptocurrency, government regulation, and a rising crypto market
The Indian government might make their own cryptocurrency
Today a senior official stated that the Reserve Bank of India (RBI) has established a group to look into making an official crypto currency that would operate as legal tender, meaning it would be officially recognized as a medium of payment by the state/legal system. The RBI is referring to this potential currency as a ‘fiat cryptocurrency’, “Something that is an alternative to the Indian rupee, so to speak.”, stated the Bank’s Executive Director, Sudarshan Sen.
The RBI remains uncertain on the status of existing cryptocurrencies (bitcoin, ether, other altcoins etc.), what they’re calling ‘non-fiat crypto currencies’ or ‘private cryptocurrencies’. During a FinTech conference in Mumbai Sen stated:
“Fiat will be when the Reserve Bank, for example, starts issuing digital currency which you can carry in cyberspace, you don’t have physical currency in your pocket. As regards non-fiat cryptocurrencies, I think, we are not comfortable with them.”
Indian Government remains wary of ‘private’ crypto
In general, RBI’s position on crypto is cautionary, saying they crypto presents potential financial, legal, customer protection and security-related risks. In February of this year, they issued a warning that individuals who hold crypto do so at their own risk, meaning that the Bank’s position may be cautionary, but is relatively lax. No one is outlawing private individuals from buying and selling crypto here. Not to mention that more than 50 new merchants were reported to be accepting Bitcoin as a form of payment in this July alone.
However, last month a panel created by India’s Finance Ministry recommended that the government make plans to regulate the use of cryptocurrencies in the country, namely by taking steps to discontinue or discourage the use of cryptocurrencies in the country. The panel also recommended that commericial establishement and intermediations using digital currencies be regulated.
Private companies continue to innovate
Despite government wariness, the Indian crypto market is on the rise. Even with the government’s evident movement towards more regulation for cryptocurrencies, bitcoin continues to be purchased in fairly large volumes in India and ICOs and digital tokens continue to exist in a gray area.
BitIndia brings altcoins to the market
Recently BitIndia, a blockchain based platform that will allow people to trade cryptocurrencies in India, announced their crowdsale campaign. BitIndia will let its users buy, sell and hold Bitcoin, Ether and Ripple in the BitIndia Wallet App as well as trade all major cryptocurrencies for Indian rupees through the BitIndia Exchange. The main goal of the BitIndia Wallet is to provide a platform for people to actually buy and sell their desired product in India in the real world, thus permitting Indian users to easily make purchases on a local level. The wallet creators hope their product will significantly boost cryptocurrency usage in the country.
Blockchain.info + Unocoin join forces
In other big news coming out of India, Blockchain.info just announced their plan to enter the Indian market via a partnership with Unocoin, India’s widely used bitcoin wallet. Blockchain.info co-founder and President Nicolas Cary sees alot of potential for mass crypto adoption in India, stating that India has transformed to become one of the fastest growing markets for cryptocurrencies.
According to Cary, approximately 2,500 Indians invest in Bitcoin each day, placing India on the path to becoming on the of the biggest digital currency markets in the world. Cary also noted that technology companies are creating a Foundation to collaborate directly with the country’s Finance Ministry to establish best practices for consumer protection and regulation in general.
