Even though there is currently a ban on decentralized digital coins in India, it has been reported that the government is considering launching a national crypto token to be used for transactions within the country.
Possible Applications Of Digital Tokens In India
According to reports by the DNA India, the governmental committee which was given the task of studying the cryptocurrency sector and proposing a suitable regulatory framework is apparently also looking into the possible application of crypto tokens to the nation’s public sector.
The committee is supposedly looking into the creation of a customized digital coin based on the Blockchain, as a digitalized representation of the nation’s currency instead of a direct substitution for the national currency. The committee is also reportedly looking into the possible application of the Blockchain based digital tokens as metro cards tokens among other possible uses.
A senior official from the finance ministry has been reported as saying that for starters the committee will examine whether the crypto tokens could be used as a replacement for smart cards including metro cards used in the public sector. He added that other possibilities being reviewed were the application of Blockchain based digital tokens in the private sector in loyalty programs. He said under this application, the crypto tokens would be limited to only purchasing tickets and would not be convertible to the national currency.
Functions Of The Inter-Governmental Committee
This inter-governmental committee, which was created in 2017 by the Ministry of Finance is inclusive of various governmental bodies such as the country’s taxation authority, the DoEA (Department of Economic Affairs). Other members of the committee include representatives from the Central Bank and the largest bank in the country, the State Bank of India.
The committee was specially created to carry out various activities which are first to inspect how the cryptocurrency space was fairing on both within the country and in other countries as well. Then it was to examine the legal and regulatory framework that was being used by the other countries which had fully adopted the crypto space as well as the measures they have put in place for curbing the potential of money laundering within the space. Upon completion of the above, the committee was then supposed to propose a suitable regulatory framework for the nation’s cryptocurrency sector.
Backtracking On Previous Statements
The committee has been in line with fulfilling the purpose with which it was formed albeit with significant delays. While the final decision of the committee was being deliberated on, the nation’s central bank ordered all financial institutions which are regulated, with the inclusion of banks and exchanges, to stop all services extended to crypto-based companies through an April 2018 issued circular.
Subash Chandra Garg, who is the head of the committee and the DoEA secretary, has said that there have been delays in the in the deliberations because the subject at hand was difficult and involved an ever-changing technology. This was in spite of his past statements where he had said that the committee would be done with the deliberations by July.