Union Finance Minister Nirmala Sitharaman announced on Tuesday that a high-level committee has suggested that all private cryptocurrencies, except any virtual currencies issued by the State, will be prohibited in India.
Repeating the government’s stance that it does not consider cryptocurrencies legal tenders or coins, the finance minister said all measures will be taken to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system. “The government will explore use of blockchain technology proactively for ushering in digital economy,” she said.
While the government proposing such regulations, here’s a look at what cyrptocurrencies mean and which nations have and are exploring state-run digital currencies.
A cryptocurrency is a generic name for a virtual currency. A single unit of a cryptocurrency is a complex digital code that cannot be duplicated. It is used as a digital asset designed to work as a medium of exchange.
Meanwhile, cryptocurrency bitcoin has hit a record-high after electric carmaker Tesla invested $1.5 billion in the digital currency.
While several nations like Ecuador, China, Singapore, Venezuela Tunisia and Senegal have issued their own cryptocurrencies, others like Estonia, Japan, Palestine, Russia and Sweden are exploring options to launch their own digital assets.
Iran too has amended its cryptocurrency legislation to enable the central bank to use virtual currencies to pay for imports, while Turkey will soon pilot digital notes. In Thailand, regulators have approved 13 legal crypto businesses to operate legally in the country.
Meanwhile, China will issue 40 million yuan ($6.2 million) as part of latest trials in digital currency this week to boost consumption over the upcoming Lunar New Year holiday.
According to reports, Beijing will distribute 10 million yuan in digital red packets each worth 200 yuan via a lucky draw each on Wednesday for use both online and offline. The city of Suzhou will also distribute 30 million yuan as part of its second trial of the ‘e-yuan’.
Switzerland is also reportedly considering the launch of a state-backed cryptocurrency with its government seeking a study on the benefits and concerns regarding ‘e-franc’.
Even the Caribbean is becoming a major player for cryptocurrency innovation, with projects backed by central banks in the Bahamas, the Eastern Caribbean and Jamaica.
The Marshall Islands has also launched its legal tender cryptocurrency after a law was passed by its parliament.