Category Archives: Crypto Token

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India Investigates Replacing Smart Travel Cards with Crypto Tokens

The Indian government is currently in the midst of reviewing the viability of substituting smart travel cards for its own central-bank issued crypto tokens.

A senior official from the country’s finance ministry and a member of the committee undertaking applicability research for the crypto token said that the committee is currently researching the use of a custom blockchain-backed crypto token to replace smart cards in the public sector, such as the metro card.

Also in the private sector, they are looking to include the tokens in such areas as air mile loyalty programs where they cannot be converted back into fiat money, he said.

The Inter-Ministerial Committee (IMC) was first established early last year by the Ministry of Finance and constitutes members from India’s taxation authority and India’s Department of Economic Affairs (DoEA), as well as representatives from India’s central bank, the State Bank of India, and several other government departments.

The IMC has also been charged with producing a regulatory road map for the cryptocurrency space and is responsible for determining the usability of crypto tokens in the public sector, partly by studying international and governmental policies and legal framework regarding cryptocurrency.

The committee has been requested to find specific measures used by governments to curb money laundering activities via crypto.

India’s own crypto token

As reported by Bitcoin News on Monday, the Indian government is in the midst of implementing a crypto token specifically for financial transactions, stressing this as different to cryptocurrencies which are currently all banned in the country.

The tokens would differ specifically from cryptocurrencies as they would be a means of executing financial transactions exclusively in India.

The president of the Digital Lenders Association of India detailed that people would have to pay for these tokens with physical money should they be instituted, removing any impact on the country’s monetary policy.

 

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India may Implement Crypto Token Specifically for Financial Transactions

The finance ministry of India is taking an interesting approach to digital tokens despite having a ban on cryptocurrencies; a new committee is examining the possibility of setting up a legitimized crypto token payment system.

A crypto token, not a cryptocurrency

Local news outlet DNA India reported that the new committee was also established under the chairmanship of the Department of Economic Affairs (DEA) secretary Subhash Chandra Garg. He said, “The committee is studying the possibility of using cryptocurrencies or the crypto technology (distributed ledger technology) for financial transactions and also what kind of regulations are needed for that.”

The crypto tokens in question are a representation of money, which differs to the standard cryptocurrencies as they are treated as money equivalents; instead, these tokens will be utilized exclusively as a means for financial transactions in India.

President of the Digital Lenders Association of India (DLAI) said that in order to obtain these crypto tokens, people will have to pay physical money for them which removes any impacts on the country’s monetary policy.

Once purchased, tokens could be stored on mobile phone devices and potentially used as remittances. According to DNA India, a senior official at the ministry also said that the crypto token could “replace smart cards such as metro cards in the public sector to start with. Similarly, in the private sector, it can be used in loyalty programmes such as air miles where its use is limited to buying the next ticket and can’t be converted into money”.

This approach is rather specific in its application, though it does offer a view for crypto-positive future in India; however, according to DNA India sources, the official cryptocurrency ban is “likely to continue”.

Clarity needed

On 5 July 2018, India officially enacted a banking ban on cryptocurrency; it’s not an outright blanket ban like China’s but instead prevents practically all fiat to crypto trading, a move that for the most part affected exchanges.

Exchanges are allowed to continue operations as long as they remove all fiat trading pairs, limiting their platforms options to crypto-to-crypto trades, much like the exchanges in China were forced to do.

Interestingly, later that month, the law reform committee of India made recommendations for cryptocurrencies to be accepted as payment for online gambling and sports betting.

The legality of cryptocurrencies in India is a hotly discussed topic; blockchain related technologies in the country are receiving public and institutional support especially with regards to the workforce, with whom there is a growing sense of urgency for regulatory clarification.

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