Indian government wary of the impact of cryptocurrencies on rupee, claims report
Well, the world of cryptocurrencies seems to be slowly but steadily making its way in the mainstream psyche. While cryptocurrencies and the technology underlying it—blockchain seem to offer a plethora of opportunities to the users, there are still risks associated with cryptocurrencies that are well depicted and are playing a big role in hindering the wider adoption of digital assets. One such country is India where the world of virtual currencies is shrouded in a veil of uncertainty and in one such step a high-level panel asked to draft a framework for India’s virtual currency ecosystem is now obsessed with its impact on the Indian rupee, according to a report by the Quartz.
As per the report, the committee led by Subhash Chandra Garg is believed to be in a state of confusion over the impact of digital assets on Indian rupee if cryptocurrencies are accepted as a mode of payment.
The panel came into being in November 2017 under the able leadership of Garg and right now it is in advanced stages of drafting regulations for cryptocurrencies in India.
Speaking to Quartz, one of the of the representatives of the cryptocurrency ecosystem said, “If Bitcoin and other digital currencies are going to be allowed to be used for payments then whether it will end up destabilizing the fiat currency is a major concern for them.”
The fears got boost after a report released by the Bank for International Settlements (BIS) last March, which said that if digital assets are issued by policy makers for settling payments might destabilize traditional banks if they are offered widely to the general public.
Speaking about the perceived threat, Rahul Raj, founder of Koinex said, ““At this point it may be a bit premature to worry about this as right now even globally only a handful of payments are made using virtual currencies and that will be the case till blockchain reaches the scale that say Mastercard or Visa have.”
But it’s still early stages in India and the government has stressed the fact number of times that it does not recognize these new-age coins as legal tender and is unlikely to do so. While the government has been open in accepting blockchain, it is not comfortable with virtual currencies, which it feels that among other things the currencies can be used for money laundering and other illicit activities.
While there is still no clarity about the future of cryptocurrencies in the country, it seems that it will take some time before the final regulations are out and some of the main concerns regarding cryptocurrencies are dealt with.
Image via Shutterstock
Join our Telegram group