Monday, June 17, 2019

India’s Central Bank Is Interested In Adopting Blockchain While Rejecting Bitcoin

The central bank of India is interested in adopting blockchain technology, however not interested in adopting Bitcoin and related cryptocurrency. This step is equally treading in the path followed by China on crypto adoption.

Blockchain? Yes. Bitcoin? No.

The national payment corporation of India, an RBI backed umbrella organization for operating retail payment and settlement system in India announced recently that it was considering adopting blockchain technology to improve their payment network.

The national body receives payment from ten banks in the country and also released a notice inviting bidders to propose their blockchain solutions as their potential “Liaisoning Consultants.”

The announcement infers that NPCI is interested in creating an alternative blockchain that would compete with the original Bitcoin blockchain. This would be done without offering any incentivization, since it would have central control over the validation and addition of blocks. This means that NPCI would use blockchain to manage records same way they have been doing with their existing database.

While the central bank is interested in adopting blockchain tech, it noted its stance via a tweet in December 2017. The tweet by Subhash Chandra Garg noted that “Cryptocurrencies like bitcoins are neither currency nor coin. Not legal tender in India at all. Trade in these currencies has assumed the character of classical Ponzi schemes. Limited supply and uninformed demand make every new investor assume a higher risk. No underlying real value.”

The recent stance of Indian central bank can be likened to the stance of JPMorgan Chase CEO, Jamie Dimon that rejected and cast aspersion on Bitcoin and later changed last two months by creating JPM coin. Though this seems a commendable action, while you are interested in the technology why condemn its use or ban its use.

The central bank of India is taking a similar stance in banning cryptocurrency while it is probably romancing a blockchain solution to aid transactions in the country.

Blockchain and Cryptocurrency In China

China has equally been uninterested in cryptocurrency with an outright ban on its trade and use in the country. Top firms that such as Alibaba, and Tencent have desisted from the use in the country. Also, recently the country made a move towards banning crypto mining. Meanwhile, most of Bitcoin mining in the world is done in China.

Though the country has a zero tolerance for cryptocurrency; it has been on a massive move in adopting blockchain technology for the construction of its future city among other projects.

The blockchain technology has seen an application in many facets of life, however, condemning the tech adoption for cryptocurrency and devising another means to use it for the financial system is similar to hypocrisy as being expressed by India.

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