‘RBI examining feasibility of govt-backed cryptocurrency’

RBI executive director Sudrashan Sen said an internal group is exploring the possibility of a fiat cryptocurrency that can be issued by the central bank. On the other hand, the RBI is not comfortable with non-fiat cryptocurrencies like bitcoin, he said. “As regards non-fiat cryptocurrencies, I think we are not comfortable,” Sen said.

By: ENS Economic Bureau | Mumbai | Published: September 14, 2017 1:54 am
Reserve Bank of India, cryptocurrency, Bitcoin, RBI cryptocurrency discomfort, cyber space, cyber security, India cryptocurrency legality, digital currency, initial coil offerings, crypto-currency exchanges, virtual currency The fiat cryptocurrency is a digital currency which will be issued by RBI in place of the physical one at present, he said.

The Reserve Bank of India (RBI) is examining the feasibility of a government-backed digital currency — or fiat cryptocurrency — even as peer-to-peer virtual currencies like bitcoin remain unregulated in the country.

RBI executive director Sudrashan Sen said an internal group is exploring the possibility of a fiat cryptocurrency that can be issued by the central bank. On the other hand, the RBI is not comfortable with non-fiat cryptocurrencies like bitcoin, he said. “As regards non-fiat cryptocurrencies, I think we are not comfortable,” Sen said.

Elaborating on what is a non-fiat cryptocurrency, Sen said: “Bitcoins for example. That’s a private cryptocurrency.” The fiat cryptocurrency is a digital currency which will be issued by RBI in place of the physical one at present, he said. A fiat currency is one that a government has declared to be legal tender, but it is not backed by any physical commodity. “Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian rupee, so to speak. We are looking at that closely,” Sen said.

Currently, Bitcoin is the most popular digital currency while others include litecoin, peercoin, namecoin, ether and primecoin. These are mostly used for peer-to-peer transfers and are accepted in a few countries as payments. Regulators globally are not comfortable with them.

In February 2017, the RBI had said that it has not authorised or licensed any company to operate in cryptocurrency. “As such, any user, holder, investor, trader, etc. dealing with virtual currencies will be doing so at their own risk,” the regulator had said. The RBI has cautioned the users of virtual currencies about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to.

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    Nov 1, 2017 at 5:10 pm
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    1. Anandi Sharan
      Oct 16, 2017 at 1:44 pm
      So the question is, why is BJP not transitioning private and nationalised bank issued electronic money to (RBI issued) DFC, when the technology exists and a committee has recognised its usefulness? The answer may of course be that such a move is a switch to a 100 reserve system. And if you have a full reserve currency you have to have the political guts to figure out what humans and Earth actually need money for. BJP INC can not hide behind socalled economic climate created in a god given way by the private banks of the US Federal Reserve system licensed by RBI and their choices enforced militarily through Stockholm syndrome on developing countries including India but excluding China through the Washington consensus. Half the babies in India are stunted ill. Average education is standard 5. 10 million Biharis suffered in a single flood. This requires money. With DFC there is no excuse but to send it to Gram Panchayats and citizens now. Boot out BJPINC Washington. Bring in DFC.
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      1. S
        Sacchidanand bhargav
        Sep 14, 2017 at 7:34 pm
        great news fake currency का बाज़ार खत्म हो जायेगा indiaa मे और जो fait का इंतज़ार कर रहे हे उनकी उम्मीद पुरी होगी पर कब तक आयेगी यह
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