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A case for India’s own cryptocurrency chain, Bharat Coin gaining momentum

, May 10, 2018, 0 Comments

cryptocurrency-bharat-coin-marketexpress-inThe masses might be wondering what – cryptocurrency or the Indian avatar of it -Bharat Coin. Let’s get into the business of deciphering the impalpable object!

Cryptocurrency as a digital asset and a virtual form of money has gained importance across the globe in recent times. No wonder almost more than two-thirds of the entire universe are still pondering on the utility of this digital currency due to information asymmetry. At the same time a lot of the geniuses are able to reap the benefits of trading in this medium of currency.

Subtly, the global economy is engrossed under the notion of digital currency ruling over the banking system and thereby making the system of banking handicapped. Looking at the craze of young minds bubbling with energy and new ideas, possibilities are quite high that the above mentioned thoughts might turn into a reality.

Cryptocurrency as a form of virtual money is used worldwide under the name Bitcoin. This virtual currency-Bitcoin has a unique feature. It is encrypted and made secure for the owner of the coin; who is supposed to spend it. The owner of the coin generates two keys for the coin-private key and public key. The public key is published and open to view by anyone, but the private key is kept secret to maintain the sanctity of the owner. The public key can be generated out of the private key, but not vice versa. The elliptic curve signature scheme is used as a signature to verify the credentials of the owner, while also ensuring that the owner holds the private key to let him spend the Bitcoin money earned. Block chain is the technology used by Bitcoin traders to send/receive money without the aid of intermediaries.

Some unraveling facts about Bitcoin:

  • Satoshi Nakamoto from Japan, is supposed to be the creator of this virtual currency (still unverified)
  • The crypto currency market is valued at USD 700 billion as of January, 2018
    Overstock.com, a US based online retail store, claimed to be only online retail store in 2014 to accept Bitcoin
  • Wannacry, a form of ransomware that globally affected more than 200,000 computers, asked for an amount of US$300 in Bitcoin to let their victim’s machines get unlocked

It is surprising to know that unlike currencies, commodities and derivatives- crypto currencies are also allowed to be traded on the stock exchange. There are also approximately 1900+ Bit Coin ATMs, functioning globally to mobilize money for its users.

Some of the crypto currencies that are traded on the stock exchange include Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, Bitcoin Gold, etc among the few.

Blockchain technology, truly referred as the disruptive one, poses a threat to the banking system and the BFSI industry in India. Since there is no formal regulatory authority to oversee the transactions happening in the Bitcoin economy, it becomes tough to penalize anyone. The government authorities and the Ministry of Finance are trying their best to put the crypto currency legislation in India, though it may take some time to come into force.

The Reserve Bank of India, the apex bank of the country and market regulator, is still quite susceptive to introduce a digital currency named Bharat Coin. While analyzing the pros and cons about the possibility of launching of Bharat Coin, the following points may be considered:

  • Bharat Coin is to be considered a modern form of digital currency and payment system, be cheaper than any other electronic mode of payment, the ability to transact anywhere with the help of mobile banking without any need of printing currency notes
  • Any individual can open his Bharat Coin account by providing his Aadhar Card and maintaining his virtual Aadhar ID, which is encrypted to let transactions happen seamlessly without the least possibility of any frauds
  • A very small amount per transaction will be charged (ranging between 10 paise to 100 paise) which will be utilized for maintenance of servers
  • A transaction will be validated within 10 seconds as opposed to the common belief of a bitcoin transaction taking 10 minutes to complete
  • The tax system will be represented in a more transparent manner because it will be easier on the part of the regulator to monitor the transaction

Thus, it is well depicted that Bharat Coin, if introduced will prove to be an impediment to the banking system of the country as the banks charge a bit high maintenance cost and other hidden charges for holding an account with any of the numerous bank branches of the country. Let’s hope that whatever is proposed by the banking regulator becomes a reality and it opens new doors for the economy to embrace virtual currency.