The Reserve Bank which has long remained cautious about the introduction of cryptocurrencies in India has changed its mind and is now planning to develop one. It has held internal meetings and discussions with other banks in this regard and is likely to go ahead with the execution at an appropriate time.
Plan of BRICS Nations
Lately, India along with other BRICS countries are considering the introducing their own☝ common cryptocurrency to counter the US Dollar.
While these plans and developments have been on a slow track, few other countries like Dubai and Venezuela have already made their plans official.
But no room for private players
Although RBI is about to take this initiative, its stance on private cryptocurrency continues to remain the same. As per it, issuing a cryptocurrency is a sovereign matter and will not be handed over to a private company.
The govt. on its part has proposed a jail term of one to 10 years for anyone involved in trading, exchanging or selling cryptocurrencies in the country.
It cites money laundering as the primary reason behind this decision.
The govts’ policy of choking cryptocurrency has pushed startups and other related companies out of business.
While many leading cryptocurrency exchanges such as Zebpay, Koinex, Coinome had to shut down their operations, other companies like Unocoin had to lay off more than half of its employees.
Relevant for GS Prelims & Mains Paper III; Economics