Bitcoin is going through a time of turmoil: while it has managed to reach new heights, it has also suffered big blows. It has been criticized, it has been split – twice, even – but it has managed to remain stable, for the most part.
Addressing the audience at the India Fintech Day conference in Mumbai, Sudarshan Sen, the Executive Director of Reserve Bank of India (RBI), said that the central banking institution isn’t very comfortable with “non-fiat cryptocurrencies,” giving an example of bitcoin as one such currency.
Instead, Sen says that the regulator is pondering over the possibility of creating a fiat cryptocurrency; “Fiat will be when the Reserve Bank, for example, starts issuing digital currency which you can carry in cyberspace, you don’t have physical currency in your pocket,” Sen said, adding that “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.”
Bitcoin’s current legal status in India is somewhat disconcerting. While the RBI has not deemed the trading of digital cryptocurrencies illegal and has allowed several bitcoin exchanges to operate in the country, it has cautioned in the past that a “user, holder, investor or trader dealing with virtual currencies is doing it at their own risk.”
Until now, the RBI had not disclosed information about any plans regarding cryptocurrencies; Sen did not provide any further details about the regulator’s plans for cryptocurrencies, and it remains unclear whether the Indian government is looking into utilizing the underlying blockchain technology, of which there seem to be many uses.