India’s government is currently strategising on launching crypto tokens of its own to enable financial transactions in the country. According to DNA India, the government has appointed an inter-governmental committee whose task it is to study and make proposal on the regulatory steps the country needs to take on cryptocurrency.
The committee set up by the government is seeking for a means to utilise a custom made, blockchain-based crypto token as a substitute in place of smart cards in metro cards, airline tickets and public sectors. The committee was set up by the Finance Ministry of India and headed by the secretary of the Department of Economic Affairs (DEA).
DEA Secretary Subhash Chandra Garg told the local news outlet: “The committee is studying the possibility of using cryptocurrencies or crypto technology (distributed ledger technology) for financial transactions and also what kind of regulations are needed for that. The currency is totally banned, the committee is discussing its other usage and how it can be mainstreamed in India.”
After formulating the regulations and propose roadmap that would guide the use of cryptocurrency, the committee will send the draft to the parliament for further approval. The committee is currently examining if crypto tokens can replace smart cards and be used in public and private sectors as well as loyalty programs like air miles where its use is limited to just the purchase of the next ticket and can’t be converted into money.
The committee will be examining the status of cryptocurrencies both in the country and internationally. They would be studying the regulatory and legal frameworks adopted by other countries. Subhash Chandra Garg explained that the government of India has yet to consider allowing the use of cryptocurrencies as a payment option or in any other manner. The DEA had also earlier released several warnings to the citizens cautioning them against the risks associated with cryptocurrencies, and even went as far as stating that cryptocurrencies are not “currencies at all” but are similar to Ponzi scheme.
Despite seeking ways to utilise cryptocurrencies, the Reserve Bank of India (RBI) and some crypto exchanges in the country are currently locked in a legal battle after the Indian central bank issued a circular restricting financial institutions in the country from dealing with crypto-related businesses.
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