Government of India is currently considering a framework around Bitcoin and cryptocurrencies in India. But in the meantime, the central bank of the country-Reserve Bank of India continues to put out a warning against use of Bitcoin or any other virtual currencies.
Emphasising the risks, RBI put out a press release once again few days ago, warning users to stay away from these currencies. RBI has warned the citizens of India multiple times in the past.
But frankly speaking, a central bank issuing a warning against a decentralised cryptocurrency and mode of payment is hardly ever surprising. The sky is also blue!
India has seen a spurt in the growth of it's users on existing Indian Bitcoin exchanges. Infact in recent times new exchanges have opened up in the country and a few thousand users are signing up and trading Bitcoin everyday!
But the fact is that most authorities are mis-informed and lack proper understanding of this technology space. An advocate P.N. Razdan even filed a petition towards regulatory step on Bitcoin. He's probably as clueless about the blockchain technology industry as most other lawmakers in India.
It seems as though people are tired of the old investment schemes, decreasing interest rates on fixed deposits and various other ways the central bank ensures that we keep our money locked-in, in the various banks of our country.
This has led to a massive increase in crypto adoption in the country where people are looking at digital currencies as speculative assets. Ergo, the government of India is no closer to it was a year ago as far as legalising Bitcoin and cryptocurrencies.
There is no incentive for the government to legalize Bitcoin. They are unlikely to receive bribes in Bitcoin and there's no money to be made other than taxes-which isn't bad but they probably want more! This is unfortunately the reality of modern day India where corruption continues to remain rampant in all levels of bureaucracy.
I cannot help but ask why the RBI didn't give out warnings prior to demonetisation-if it really works to protect interest of it's country's citizens! Or does it? But fact remains that their actions drove citizens towards greater crypto adoption, resulting in Bitcoin trading at over 35% premium in November last year, so I'm hardly complaining here!
As we get closer to the end of 2017, Bitcoin remains in a grey area but as long as you pay your taxes, you are OK! If you want learn more about filing your returns on your Bitcoin profits, read my article here!
Blockchain Adoption By Private Banks
While the Government of India chooses to delay the inevitable, some of the biggest names from the Indian banking industry have begun adopting blockchain technologies.
Bank Chain was formed earlier this year with 30 participating members from all major banks in the country for exploring, building and implementing blockchain solutions. Participating member banks have agreed to share technology and resources towards this initiative.
State Bank of India-the biggest bank in the country is all set to utilize blockchain technology for smart contracts and KYC in the next few weeks.
Axis Bank has started cross-border payments using Ripple's technology. Yes Bank and ICICI Bank have both tested blockchain technology for specific implementations of their own while Kotak Mahindra Bank enables blockchain based trade financing operation.
This shows that the banks are favouring blockchain technology. This is likely to create a spurt in startups looking to building blockchain based solutions in the country.
Blockchain, not Bitcoin seems to be the mantra for now as far as the government is concerned. This does not in anyway imply that the government will enable blockchain in their departments. If that were the case, India could finally have chance at tackling corruption and bribery. But, there's a ray of hope if the State of Telangana adopts blockchain technology for securing land records. Other states may choose to follow it.
As far as the RBI is concerned, it seems comfortable allowing the banks to implement blockchain solutions internally and that's about it.
But, this begs the question, what is the future of Bitcoin in India and the rest of the world?
I suppose, only time can answer this question.
If you like my work kindly resteem it to your friends. You may also continue reading my recent posts which might interest you:
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Very good thinking @firepower, india vs blockchain transparency :-)
India will never ban Bitcoin, will only issue warning against it.. as it is now being used as a convenient method for election funding and anonymously transferring money in Bitcoins to their party workers, so neither government nor the opposition will ever think to ban Bitcoins.
To some extent I agree to what you said.
Thanks for agreeing to some extent :-)
very informative post and interesting post. thanks for sharing. please check my post and upvote me. sir
this is the bitcoin era
Imagine the increase currently, so there is a better future in bitcoin and blockchain. Nice post
They warned us to stay away from Bitcoin.
That's true?
Bitcoin scares the governments of many countries not only in India. They are afraid of the emergence of a new economy for which they will not be able to influence, although this has already happened. Bitcoin is a fact
But, this begs the question, what is the future of Bitcoin in India and the rest of the world? Regards to that, you just said it, only time could tell. Thanks for the post.
It's a nice topic, I've learned a bit more. Thank you.
Exactly.. we want to know what will be our future..would RBI accept it..? And its a good news that SBI and other private banks are in favour of it and is going to utilise this technology..
Exactly one of the reasons why bitcoin came conquering fiat currencies.
Most Governments of some countries are very actually envious of the fact that when bitcoin takes a full centre stage in the world, corruption in government will come to a halt. This isn't only obtainable in India only but some many other parts of the world.
I love your article.
RBI'S stance on bitcoin is not clear. There was some hoax news like RBI want to adopt its own cryptocurrency. But alas who knows what's in the mind of RBI.
I thought anyway blockchain is the real gold not bitcoin. Government is just issuing warning to generate awareness because the crypto world is full of uncertainty.
Crypto-currencies have a potential to tackle many of our present and future economic problems but it is a monetary revolution and they have to go through their own test of predicament. Friend read history cryptocurrencies are trying to stand parallel to fiat where most failed in our glorious past. Right now it seems the battle is won but a single mass weapon can change the course of victory.
There's so much corruption in India that bitcoin can easily be used for illicit activities. I think the Indian government is not against bitcoin, but it wants to try to somehow monitor bitcoin transactions, but has not figured out just how to do it effectively yet.
BTC is trading topic in India at the moment and I heard too that RBI refused to take responsibility if they not paid but hope everything will Short out and will legit clearly.
Very dicey situation for government as well as for RBI. Its will b done but not so easily...bit reluctant to adapt to the changes. Just like notbandi...still i m happy it is under consideration...the documents are already on the table...👍👍👍👍 hope for the best
The news is very interesting and very useful@steemflow
Indeed very exciting to lookout on the progress...let kip d finger crossed👍😉
The news is very interesting and very useful@firepower
The news is very interesting and very useful@firepower
Banks and financial institutions are interested in Blockchain, though some of them don't disclose publicly. It is just a matter of time for things to change in India.
Ridiculous...so because the countries government can't benefit from it...they either talk sh#$ about it or ban it. And people tell me evil doesn't dun this world :/
interesting post friend ! thanks for sharing :)
State Bank Of India has started working in background. Hope in future we will have positive news about bitcoin.
Yes your information is correct i had some clue about Lakshmi as India crypto currency.
Very interesting and week written article. I'm still new to the world of cryptocurrency and trying to wrap my head around it all. Thanks for a informative post.
Awesome post @firepower. I'm always interested in what India is doing lately. China gets all of the attention lately, but India is another rising superpower that will help shift some of the power centers away from the West.
Reading what you say about the banks' Bankchain initiative on blockchain, I was sort of chuckling to myself a little. I've sat in on corporate meetings where people talk about the latest buzz word, which just so happens to be blockchain these days, realizing that nobody knows a damn thing about it and that they're just posturing to show that they're "doing something to bring the company into the latest trend."
My guess is that they'll have to bring in consultants to have any hope of actually implementing the technology in their operations. Often times, these entrenched corporate structures are not flexible to the kinds of changes that would be suggested, so I'd be surprised if they did anything meaningful in the space other than set up exchanges and derivatives markets. We'll see though. Where there's money to be made, people do tend to find a way, but when it's a disruptive technology doing it, it tends to come from outside established companies.
India will by no means ban Bitcoin, will only trouble warning against it.. as it's miles now being used as a handy technique for election funding and anonymously shifting cash in Bitcoins to their celebration people, so neither authorities nor the opposition will ever assume to prohibit Bitcoins.
Interesting. .. not only the Indian are doing this i guess every governments now are treading and transfering Bitcoins all over the glow.
Hi @firepower.....
I m from India.
I resteemed your post....... Please guide me on steemit
Let’s keep aside all the hype around Bitcoin aside for a moment. The main and fundamental reason what makes Bitcoin so appealing is not that it’s a crypto-currency or the technology aspect, but that it’s decentralized. There is no entity/authority that is going to dictate. That goes against the very nature of any government which likes like to have control over its population so that it can implement its policies (the policies may be good or bad, that’s a different story). And for that very reason I do not see Government of India or any other government legitimizing any ‘decentralized’ crypto-currency. Even if they adopt the technology or come up with an alternate crypto-currency of their own they would retain the control and we can kiss the decentralized aspect 'bye-bye'.