Indian Government Will Not Issue Cryptocurrency, Says Chief Economic Adviser

On October 24, 2017, the chief economic adviser for India said that the government will not issue cryptocurrency, per Reuters. This statement by Arvind Subramanian, who has served as chief economic adviser since October 2014, conflicts with earlier indications by Indian government officials.

ETHNews reached out to Subramanian to verify his statement. We will update this story when we receive confirmation.

Last month, an Indian cryptocurrency was the talk of the town. On September 13, 2017, Sudarshan Sen, executive director of the Reserve Bank of India (RBI), told attendees at the India FinTech Day conference that the central bank was examining a cryptocurrency alternative to the rupee. Three days later, Business Standard reported that a committee of government officials had discussed a proposal for an Indian cryptocurrency and an unidentified source said the government might christen its cryptocurrency “Lakshmi.”

The Reserve Bank of India has displayed few indications that it is moving forward with a government-backed cryptocurrency. A search for “Lakshmi” on the RBI website returns only one result – and it’s not cryptocurrency-related. “Cryptocurrency” returns zero results. The most recent mention of the phrase “digital currency” is from March 2017 and the most recent mention of “blockchain” is from August 2017.  

Earlier this month, Ajay Banga, the CEO of Mastercard and former chairman of the US-India Business Council, offered his thoughts on digital currency in an interview with The Economic Times.

“If the government creates digital currency, we will find a way to be in the game,” said Banga, signaling that traditional financial institutions will adapt to government cryptocurrency implementations. “Government mandated digital currencies are interesting.”

“Non-government mandated currency is junk,” he added.

Despite Subramanian’s announcement, Indian leaders have previously experimented with the nation’s economy on a large scale. In November 2016, Prime Minister Narendra Modi began demonetization to crack down on the shadow economy. If the nation’s leaders are willing to take such drastic economic measures, then maybe the crypto rupee isn’t such a fantasy after all.