Is this a ploy to rouse interest in the Indian government project code-named “Lakshmi”?
Editor’s Note: The last time India did some extreme monetary policy, they did not announce any intentions prior. It was November 9th, 2016, after the 2016 U.S. Presidential Election, that Prime Minister Modi announced, without warning, that all $500 and $1000 Rupee Notes were immediatly demonitized (essentially worth $7.50 and $15 U.S. each note). That immediately thrust the nation into a chaos from which they have yet to recover.
via Business Standard:
As bitcoins touch record levels, a government panel has advised closing cryptocurrency dealers in India.
The panel made the suggestion to curb the use of cryptocurrencies in the country, ETNow
reported on Thursday quoting agencies.
The report surfaces at a time when Bitcoin’s price has zoomed past $7,000 after the Chicago Mercantile Exchange (CME) Group Inc’s announcement on Tuesday that it plans to introduce bitcoin futures by the end of the year, after regulatory approval. Following the announcement, Coinbase Inc added more than 100,000 users in 24 hours.
In July, Business Standard
had reported that the government is considering setting up a regulatory structure to oversee trading of bitcoin.
According to market experts, banning cryptocurrency dealers or exchanges would not work as trading of virtual currencies has increased globally and have given extraordinary returns. However, adoption of bitcoin can also pose various problems for the government as it will tend to loose its control over the financial system.
At present, bitcoin is hovering around Rs 4.90 lakh mark in India against Rs 1.79 lakh where it had three months back on August 2, 2017.
Instead of closing cryptocurrency dealers, the government should take steps to curb buying and selling of bitcoins or cryptocurrencies in cash, Hesham Rehman, CEO & Co-founder, Bitxoxo, a bitcoin exchange operating in India told ET.
Meanwhile, Credit Suisse Group AG Chief Executive Officer Tidjane Thiam asserted that bitcoin is the “very definition of a bubble”. “Most banks in the current state of regulation have little or no appetite to get involved in a currency which has such anti-money laundering challenges,” Thiam said.
“From what we can identify, the only reason today to buy or sell bitcoin is to make money, which is the very definition of speculation and the very definition of a bubble,” he added.
Last month, Business Standard noted that the government is considering the possibility of introducing its own cryptocurrency, code-named “Lakshmi”. If it is introduced, “Lakshmi” would run on some variation of the blockchain technology employed by bitcoin that verifies every trade and rules out dual transactions employing the same coin. However, the Reserve Bank of India (RBI) would have to solve several tricky questions before introducing “Lakshmi
The government is reportedly considering the possibility of introducing its own cryptocurrency, code-named “Lakshmi”. Being backed by fiat, this would provide an alternative to popular non-fiat cryptocurrencies such as bitcoin and ethereum. If it is introduced, “Lakshmi” would run on some variation of the blockchain technology employed by bitcoin that verifies every trade and rules out dual transactions employing the same coin. The introduction of such a new cryptocurrency, which would be legal tender alongside the rupee, requires legislative action in amendments to