The rising prices of cryptocurrencies such as bitcoin attracted unsophisticated retail investors and spectaculars and had also brought them under the scanner of governments all over the world. At present there are over 1300 cryptocurrencies operating worldwide.
India has identified 11 exchanges dealing with virtual currencies.
Last year the Income-tax authority of India conducted a survey and reported that there are about six lakhs active traders of cryptocurrency in our country mostly in the age group 25-35. Popular wallets for selling or buying virtual currencies in India are a Unocoin, Zebpay, Coidelta, Koinex.in that are providing Bitcoins, Ripple, Ethereum, Litecoin, Bitcoin Cash for buying/sell in rupees. In India, a single Bitcoin Costs close to 12 lakhs and is Rs 2,30,00 more expensive in comparison to US prices.
An I-T official quoted that unless the currency is liquidated cryptocurrency is notional. They have not been able to find the amount liquidated, and the exercise is still on. As no trail of liquidation is available, I-T sleuth is finding it difficult to trace the traders.
Last year in December Reserve Bank of India cautioned the traders, users and holders of Bitcoins about the security-risks associated with virtual currency dealing.
Reasons why government and RBI think cryptocurrency possess security-related risks are discussed below:
- As virtual currencies are in digital form, they are stored in electronic wallets, a digital-electronic media. They are prone to losses that may arise out of the loss of password, malware attack, hacking etc. If the trader loses e-wallet, he loses VC’s held in them permanently.
- As payment on virtual currency takes place on Peer-to-peer basis and is not regulated by an authorised agency thus the framework for recourse to the customer’s chargebacks, disputes and customer problems is not established.
- For virtual currency, there is no backing or underlying of any asset. The value of cryptocurrencies seems to be a matter of supposition. In recent past high volatile has been noticed in the price of bitcoin and so the user is unprotected to possible loses on account of such volatility in the price.
- The legal status of exchange platforms through which cryptocurrencies are traded is not clear thus the traders are exposed to financial as well as legal risks.
- Reports show that digital currencies are majorly used for illegitimate activities. There is the absence of counterparties in the peer-to-peer system could subject the traders to an unintentional violation of reducing the financing terrorism or anti-money laundering.
On 2nd January 2018, India’s finance minister Arun Jaitley informed parliament that cryptocurrencies are not recognised as legal or lawful tender in India. He indicated that these virtual currencies pose risks such as money laundering and were not backed by an asset. Those who are indulging in such transactions is doing it at their own risk, and cryptocurrency users and dealers have no legal protection. He also added that the issue is still being studied and a committee of experts would be set under the chairmanship of the secretary, department of economic affairs to see the problems related to cryptocurrencies and propose specific action to deal with it. After the committee submits the report, specific measures will be taken, and regulations will be set up for the use of cryptocurrency In India.
Barely a fortnight after Indian finance ministry stated in the parliament that creation, usage and trade of cryptocurrencies is not authorised by the monetary authority of India as a medium of payment it has been reported that Reliance Jio is planning to launch its cryptocurrency ‘JioCoin’. The project will be led by Akash Ambani, the elder son of Mukesh Ambani. The plan is to hire a team of 50 young professionals to work for the development of JioCoin through blockchain technology. There are numerous applications of the blockchain, and the group will be working on developing different blockchain products.
Till date, cryptocurrency has been the most popular application of blockchain technology. However, its transaction is not just limited to finance but can also be used in crowdfunding, smart contracts, supply chain management logistics, governance, data management, IoT and data management.
The blockchain is digital ledger working as cryptocurrencies bookkeeper. In other simple words, blockchain stores information across a peer-to-peer network. It without letting the info copied decentralises it. Through the shared database, the data is held on the blockchain and can be retrieved on a real-time basis. As the database is stored in the cloud and not on physical servers, thus unlimited data can be stored easily.
Blockchain technology is incorruptible and transparent. It is not controlled by a single body or institution. It is a self-auditing ecosystem that checks every transaction that happens in it automatically.
Reliance Jio aims to get into IoT (Internet of Things) where blockchain technology will be useful.
Internet of Things is the network of devices such as wearable technology, smartphones, vehicles and appliances linked to the internet enabling these objects to interlink and interchange data. It is supposed that in future IoT will enter every aspect of our life from smart cities, smart homes, smart factories to driverless cars. Blockchain technology labels each block of data and shields against the data tampering and is likely to address any security threat to IoT
The JioCoin plan is its initial stages. There is no official update about how reliance Jio will use the blockchain technology. One of the officials only said “It can be used in supply chain management logistics. Loyalty points could altogether be based on Jio Coin.”
JioCoin ICO is expected to be launched in Mid February 2018, and as per the popularity price for 1 JioCoin is expected to be 1$. Also, it is likely that initially, Reliance Jio may release Jio Coin on JioMoney app in which by using your wallet balance you will be able to buy JioCoin. After a few days, it will also become available for purchase on popular exchanges such as Binaace, Konex and Bittrex. However, nothing is official till now. Once the launch date is official, our readers will be updated. The exciting part is to see how the financial mandarins will warm up to the idea of JioCoin.