Bitcoin Economy and Indian Financial System

Prof.S.Saravanan

Sankara Institute of Management Science

Bitcoin came to existence in 2009 and is the first digitally decentralized currency that one can use for trading through online platform. Anyone who wants to use this Bitcoin must have a digital wallet that is in form of an application, cloud store or hardware. It was introduced to give people a substitute system for banking.

Traditionally buying and selling of commodities has taken place under a unified system of payment. The central bank has always acted as an independent intermediary between the two or more individuals involved in trade. The banks are perceived to be a sure means of payment. India has not yet fully adopted the use of digital currencies. An advisor and a strategic stakeholder in BTCX India, Linus Lindgren, reiterate that the use of Bitcoin in India per day is a portion of other nations.

The citizens of India are disappointed by the country’s poorly executed and communicated monitory decisions hence resulting in high demand for Bitcoin. In India, people and several organizations are making efforts to preach the Bitcoin gospel. They believe that Bitcoin could be a solution to the impunity within the Indian government monetary structures.

In the growing demand for the use of Bitcoins and the weakening of the local currency, Indian government is realizing that it can’t restrain its citizens from the use of Bitcoins as a medium of exchange. In the beginning of the year 2017, the Ministry of Finance through the Economic Affairs Department, appointed a committee that would look into matters concerning the use of virtual money.

Furthermore, the government of India has begun a conversation on its online portal to gather opinions from the citizens over the operation of virtual money. The government has taken an initiative to understand the operation of Bitcoin and is ready to offer resources to build structures.