Indian Central Bank Will Not Allow Bitcoin as Legal Tender

The Executive Director at the Reserve Bank of India, S Ganesh Kumar, recently expressed the system’s hostility towards the new-age digital currency and rejected any possibility of allowing Bitcoin as legal tender in the near future.

He gave this statement while addressing an audience at FIBAC, a conference organized by the Indian Banks Association in Mumbai.

He stated: “Our current position on bitcoins is that we will not be using it for any Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term and settlements...though the technology underlying cryptocurrencies will not end.”

Kumar's statement ended the ongoing speculation on the legitimacy of cryptocurrency in India. Despite the unwillingness to accept the digital coins, the potential of Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term technology is widely studied. Many Indian banks are researching the potential of decentralized ledger technology and also launched some pilot projects to enable overseas transactions, international remittances, and a few other processes.

In September the authorities said that they are looking at the possibility of fiat currencies, but also mentioned that they are not comfortable with Bitcoin or other virtual tokens.

In September, Sudarsn Sen, Executive Director of RBI, said: “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."

On 2nd November, ETNow reported that a government panel had advised closing all the cryptocurrency agencies in India. This report came just after the announcement of Chicago Mercantile Exchange (CME) Group that it is planning to introduce Bitcoin futures by the end of this year.

All this comes after Arun Jaitley, Finance Minister of India, in August mentioned the willingness of the government to regulate the use of the virtual currencies like Bitcoin by preparing a roadmap. His statement was based on the report of an official committee that has suggested not legalizing cryptocurrencies.

In India, the central bank has not issued any license or authorization to any entity dealing with the digital currencies.