The traditional banking and financial sector is filled with hypocrites. On one hand, these institutions want to implement the distributed ledger technology introduced by Bitcoin, whereas on the other they don’t want to accept Bitcoin for what it is. The Reserve Bank of India has just proven it by issuing a warning against the use of Bitcoin.
It is the second such warning against Bitcoin issued by the Reserve Bank of India. The recent notification follows the earlier one, published way back in December 2013. The warning states,
“The RBI advises that it has not given any license/authorization to any entity/company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc., dealing with virtual currencies will be doing so at their own risk.”
The notification, which may be in the best interests of the people is appreciated. But the timing of such a notification, given the central bank’s recent misadventures is questionable. The Reserve Bank of India has received sufficient flak for executing a poorly planned demonetization drive that resulted in disrupting the livelihood of many while jeopardizing the country’s economy. The demonetization drive, which was supposed to be against undeclared income and tax evasion failed to yield results. It forced the government and the central bank to term it as an initiative to create a “cashless” economy.
As the Indian government and the central bank continues to promote electronic payments among the masses, they seem to have failed to notice that Bitcoin is also a form of cashless payment. The use of Bitcoin in the country increased following the scarcity of cash created by the authorities.
Ironically, the Reserve Bank of India’s research and development arm recently tested a blockchain platform for trade application and even published a report on it. Other leading Indian banks are also currently working on blockchain-based applications.
While the Reserve Bank’s notification doesn’t come as a surprise, it is still worth noting that the central bank, instead of facilitating the adoption of cryptocurrency or cryptocurrency-based services, it is discouraging people from using it. A positive view of Bitcoin among the RBI and government officials can go a long way in helping the country’s huge unbanked and underbanked population.
Ref: Live Mint | Image: NewsBTC