The largest industry body representing the digital ecosystem in the country, Internet and Mobile Association of India [IAMAI] has welcomed official digital currency through the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 which was proposed by the government.
Accessible through credit cards, smartphones and online cryptocurrency exchanges, a digital currency is a non-tangible currency. Its transactions and circulation will be recorded and it would be issued by the government. By reducing the price of acquiring or sharing information securely, such currencies can significantly reduce transactions cost. Such transactions’ safety standards and monitoring can be managed through the emerging blockchain technology and ensured through inalterable public ledger systems developed. Soon after the Report on the Inter Regulatory Working Group on Fin-tech and Digital Banking chaired by Shri Sudarshan Sen, the Reserve Bank of India has first hinted at a fiat cryptocurrency in 2017. The Bank, on its paper on the Distributed Ledger Technology, Blockchain and Central Bank, then detailed on the idea of a Central Bank based digital currency. The global benchmarks of a Central Bank based Digital Currency were discussed on the paper and its possible application in India were also discussed.
Giving impetus to the broader application of the distributed ledger technology, the association believes that an official digital currency regulated by the government will create avenues of fintech innovation that are yet to be explored within the country. The importance of the blockchain technology has been highlighted in the recently published “National Strategy on Blockchain” by the Ministry of Electronics and Information Technology, elaborating the various applications of the technology across various sectors of real sate, law, supply chain, trade, insurance and many others.
It has been indicated in a section of the media and non-expert circles; the introduction of fiat digital currencies is preconditioned on “banning” other crypto assets as the association would point out. Fiat currency serves a totally different purpose than the other crypto currencies in India and both of them can co-exist as IAMAI would humbly question this artificial co-relation on grounds. A wide scope for Indian entrepreneurs opens up, the existence and use of crypto assets by Indian consumers to issue such currencies. Indians who comprise 15% of the global buyers will prefer an Indian crypto asset.
