The RBI (Reserve Bank of India), which is the Indian central bank, has formed a task force with the aim of assessing virtual currencies like Bitcoin. Why? In order to determine whether they can be given legal tender status or not.
In the near future, the Reserve Bank of India is anticipating to draft regulations in regards to the usage of the cryptocurrency. Lately, the bank is also contemplating whether to digitize rupee or not. These deliberations are a result of an outright hate for bitcoin.
That RBI move is likely to make India one of the top countries in the world in terms of the handling of digital currencies in the foreseeable future. But currently, there are no details of the plan of action that the central bank will take to regulate the virtual currencies.
The only thing people can do is wait and see how long it takes before something is done. For now, people should continue using the virtual currencies as before without tight regulations being in place.
How the Other Countries are Dealing With Digital Currencies
Globally, a number of countries are still experiencing difficulties in determining how to define properly the various virtual currencies such as Bitcoin. These challenges are cropping up because of the unique nature of this new form of money.
Other reasons why many governments are having issues on how to regulate virtual money include stability, reputation, volatility, future technology and user base among others. Still, that is just a tip of the iceberg considering the number of issues to be taken into account before regulations are put in place.
Several countries are implementing strict regulations for handling this new type of currency. The approach used is very cautious because there is not enough information to base regulations on.
There is also a group of countries that have no regulations in place to control the use of cryptocurrencies. That methodology of inaction is likely to bring more confusion to the consumers in the near future.
Constructive Effects of the RBI Move
In the past, the Indian government has shown a negative stance towards the use of digital currencies but that seems to have changed recently. The government is seen to have adopted an open-minded approach towards the regulation of virtual currencies.
Any decision that the RBI will make in the foreseeable future is anticipated to have a huge effect on the level of acceptance of the cryptocurrencies. What does that mean? The use of virtual currencies like Bitcoin, by the consumers, will largely depend on the regulation that the government will adopt.
A lot of players in the financial industry are expecting the central bank to decide positively on the issue of regulating the cryptocurrencies. Nevertheless, the RBI is also anticipated to enforce some restrictions on how the virtual money will be used.
Will India benefit at all if it adopts the different digital currencies? According to many people in the financial sector, India will benefit substantially if it allows the use of the digital currencies. At least that is what a lot of the above discussion is based on.