Earlier, last week India’s central bank Reserve Bank of India (RBI) showed its discomfort with Bitcoin while agreeing that it may make cryptocurrencies in the country as legal tender. Now, in a latest development RBI is considering its own cryptocurrency since it is not comfortable with non-fiat cryptocurrency like bitcoin.
Earlier this year RBI issued a notice to the users of virtual currencies in the country and urged them to be extra cautious while engaging in any digital currency-related activity.
A group of experts at RBI is examining the possibility of cryptocurrency which would become an alternative to the Indian rupee for digital transactions, and unlike bitcoin which is a non-fiat digital currency, the new one will be fiat-cryptocurrency. Fiat currency means a currency that is forced into circulation by a government.
According to a media report, RBI’s own Bitcoin can be named Lakshmi, after the Hindu goddess of wealth.
Lakshmi could be a part of creating its own Blockchain, a distributed digital ledger and technology that supports cryptocurrencies.
The development was first reported in Economic Times.
Despite a distrust of non-fiat cryptocurrencies, central banks all over the world have taken note of their effectiveness and popularity.
In China, The People’s Bank of China has done trial runs of its prototype cryptocurrency, taking it a step closer to being the first major central bank to issue digital money, according to a Bloomberg report.
In Netherlands, the Dutch central bank has created its own cryptocurrency for internal circulation just to better understand how it works, says the report.
Although there are countries that are starting to accept the use of bitcoins as “money” so to speak, most countries don’t enforce the use of bitcoin hence not a fiat currency.