Is India Adopting Bitcoin Or Only The Technology Behind It?
Government of India is currently considering a framework around Bitcoin and cryptocurrencies in India. But in the meantime, the central bank of the country-Reserve Bank of India continues to put out a warning against use of Bitcoin or any other virtual currencies.
Emphasising the risks, RBI put out a press release once again few days ago, warning users to stay away from these currencies. RBI has warned the citizens of India multiple times in the past.
But frankly speaking, a central bank issuing a warning against a decentralised cryptocurrency and mode of payment is hardly ever surprising. The sky is also blue!
India has seen a spurt in the growth of it's users on existing Indian Bitcoin exchanges. Infact in recent times new exchanges have opened up in the country and a few thousand users are signing up and trading Bitcoin everyday!
But the fact is that most authorities are mis-informed and lack proper understanding of this technology space. An advocate P.N. Razdan even filed a petition towards regulatory step on Bitcoin. He's probably as clueless about the blockchain technology industry as most other lawmakers in India.
It seems as though people are tired of the old investment schemes, decreasing interest rates on fixed deposits and various other ways the central bank ensures that we keep our money locked-in, in the various banks of our country.
This has led to a massive increase in crypto adoption in the country where people are looking at digital currencies as speculative assets. Ergo, the government of India is no closer to it was a year ago as far as legalising Bitcoin and cryptocurrencies.
There is no incentive for the government to legalize Bitcoin. They are unlikely to receive bribes in Bitcoin and there's no money to be made other than taxes-which isn't bad but they probably want more! This is unfortunately the reality of modern day India where corruption continues to remain rampant in all levels of bureaucracy.
I cannot help but ask why the RBI didn't give out warnings prior to demonetisation-if it really works to protect interest of it's country's citizens! Or does it? But fact remains that their actions drove citizens towards greater crypto adoption, resulting in Bitcoin trading at over 35% premium in November last year, so I'm hardly complaining here!
As we get closer to the end of 2017, Bitcoin remains in a grey area but as long as you pay your taxes, you are OK! If you want learn more about filing your returns on your Bitcoin profits, read my article here!
Blockchain Adoption By Private Banks
While the Government of India chooses to delay the inevitable, some of the biggest names from the Indian banking industry have begun adopting blockchain technologies.
Bank Chain was formed earlier this year with 30 participating members from all major banks in the country for exploring, building and implementing blockchain solutions. Participating member banks have agreed to share technology and resources towards this initiative.
State Bank of India-the biggest bank in the country is all set to utilize blockchain technology for smart contracts and KYC in the next few weeks.
Axis Bank has started cross-border payments using Ripple's technology. Yes Bank and ICICI Bank have both tested blockchain technology for specific implementations of their own while Kotak Mahindra Bank enables blockchain based trade financing operation.
This shows that the banks are favouring blockchain technology. This is likely to create a spurt in startups looking to building blockchain based solutions in the country.
Blockchain, not Bitcoin seems to be the mantra for now as far as the government is concerned. This does not in anyway imply that the government will enable blockchain in their departments. If that were the case, India could finally have chance at tackling corruption and bribery. But, there's a ray of hope if the State of Telangana adopts blockchain technology for securing land records. Other states may choose to follow it.
As far as the RBI is concerned, it seems comfortable allowing the banks to implement blockchain solutions internally and that's about it.
But, this begs the question, what is the future of Bitcoin in India and the rest of the world?
I suppose, only time can answer this question.
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Very good thinking @firepower, india vs blockchain transparency :-)
India will never ban Bitcoin, will only issue warning against it.. as it is now being used as a convenient method for election funding and anonymously transferring money in Bitcoins to their party workers, so neither government nor the opposition will ever think to ban Bitcoins.
To some extent I agree to what you said.
Thanks for agreeing to some extent :-)
very informative post and interesting post. thanks for sharing. please check my post and upvote me. sir
this is the bitcoin era
Imagine the increase currently, so there is a better future in bitcoin and blockchain. Nice post
They warned us to stay away from Bitcoin.
That's true?
Bitcoin scares the governments of many countries not only in India. They are afraid of the emergence of a new economy for which they will not be able to influence, although this has already happened. Bitcoin is a fact
But, this begs the question, what is the future of Bitcoin in India and the rest of the world? Regards to that, you just said it, only time could tell. Thanks for the post.
It's a nice topic, I've learned a bit more. Thank you.