As usual instead of coming up with some unique method of its own, the Indian government has decided to ape its foreign counterparts. According to a recent piece in DNA, India’s Union Ministry of IT and Electronics is currently in the midst of analysing models adopted by countries such as Canada, Australia and the US for regulating digital currencies such as bitcoin.
Not only this, the ministry has also gone ahead and arranged a meeting with the top IT players in the country including names like TCS and Infosys so as to get a better understanding of blockchain technology which is used in digital currency such as bitcoins and its future applications. The ministry also wants to pick their minds about how they can explore implementing regulations on these digital currencies in the Indian subcontinent.
A senior official from the IT ministry revealed to DNA that not only is the ministry interested in blockchain application in bitcoins, but it also wants to find out how the technology can be put to use in the Indian government.
It is important to note that big IT companies such as Wipro, Cognizant and Infosys have already made significant investments in blockchain technology. In fact, the Indian banking sector has also embraced the technology with open arms.
ICICI Bank that had first announced about using the blockchain solutions for international trade finance and remittances in October last year. This was followed by Yes Bank announcing the usage of the technology for vendor financing during the start of the year.
The third largest private sector lender in the country, Axis Bank also decided high to follow the footsteps of its peers Yes Bank and ICICI Bank, and became the third bank in India to begin using block chain solutions for its operations. It is taking help of fintech firm Ripple’s network for cross-border transactions- an area that the bank is aggressively pursuing nowadays keeping in mind the future growth.
Last month we had reported how an intergovernmental panel had finally completed its draft proposal work on recommendations to regulate the use of cryptocurriencies in the country effectively, a task it has been working on for a few months now.
The intergovernmental panel that was especially formed to work on the task in April this year had submitted its plan on the matter to the Indian Finance Ministry in the first week of August.
While the contents of the draft proposal are still unknown, previous media reports had highlighted that some members of the panel have strong inclination towards imposing stricter regulation against the use of the cryptocurrencies in the Indian subcontinent. Others, meanwhile, want the government to come up with some kind of a tax policy for digital currencies.
When it comes to the Indian subcontinent, there’s an ongoing debate about whether digital currencies like Bitcoin should be regulated or not.
While the government’s stance on the matter is still unknown, the Bitcoin industry in India is in favour of a self-regulatory body.
As of today, despite registering huge demand, India does not have any monitoring mechanism for virtual currencies in place. While countries like the US, European Union, Australia have indirectly given a stamp of approval to the legal usage of bitcoins–the most commonly used virtual currency– by introducing regulatory mechanism, there are others like Russia and Iceland who have banned them completely.
The current status is, that the finance ministry is currently locked in deep consultations and brainstorming sessions with other union ministries, including the IT and electronics to understand the implications that might come with legalising digital currencies in the country.