According to an exclusive news break by CNBC Awaaz, the Indian government may be planning to launch two digital currencies - one stable coin which will be basically an INR equivalent in digital form and another currency which may give interest to users. The stable coin will essentially be a digital fiat currency that can be used to buy goods and services whereas the more interesting interest-bearing cryptocurrency may power unique financial instruments such as government bonds. Sources from the government also told CNBC Awaaz that distributed ledger technology is being explored for large-scale cross border transactions. However, the biggest news coming out of this report is that the government may also ban the use of Bitcoin and other cryptocurrencies.
While reports like these may be alarming, it is technically impossible to ban the use of cryptocurrencies. If the government bans cryptocurrencies, it will give rise to an underground, parallel economy through OTC trading, P2P trading and even international crypto exchanges. It would be better for the government to regulate cryptocurrencies by mandating the use of its own digital currency as the base layer before transacting in any cryptocurrency exchange.
In addition, if the government cryptocurrency is planning to build these two cryptocurrencies on its own blockchain, it could very easily be exchanged into other coins with the use of atomic swaps. So, how can you stop the use of other cryptocurrencies? If the report is indeed true, the government is once again shown that it does not understand the potential of cryptocurrencies. We once again urge the government to be open to cryptocurrencies so that India is not left behind in this revolution.
Footage Courtesy CNBC Awaaz: https://twitter.com/CNBC_