Bitcoin has been making waves all over the world since the past few months and with the presentation of Budget 2018 that happened today at the Parliament, it had been in the expectations of the general public that clarity on cryptocurrencies would also be provided. Finance Minister, Arun Jaitley said in his Budget speech that, the currency is illegal and the government was not going to recognize it.
The rising craze for bitcoin, a cryptocurrency that has rocketed to shocking highs, has already come under the government’s lens. Bitcoin can be an easy way to evade tax or snare unsuspecting small investors in ponzi schemes. The government has already begun a crackdown on illegal uses of this unregulated virtual currency.
However, the Minister has announced that the Government will adopt blockchain, the technology that supports cryptocurrencies. The Reserve Bank of India (RBI) is already looking at the brave new world of cryptocurrency. The success of Bitcoin may have encouraged the central bank to consider its own cryptocurrency since it is not comfortable with this non-fiat cryptocurrency. A group of experts at RBI is examining the possibility of a fiat cryptocurrency which would become an alternative to the Indian rupee for digital transactions.
RBI’s cryptocurrency could be a part of creating its own Blockchain, a distributed digital ledger and technology that supports cryptocurrencies. State Bank of India has taken the lead in bringing lenders and tech companies together for using Blockchain technology to share information among banks which will eventually help prevent frauds and tackle bad loans which are almost one-fifth of banks’ loan book. The SBI’s initiative christened Bankchain, is in partnership with IBM, Microsoft, Skylark, KPMG and 10 commercial banks.