Official Digital Currency and Other Cryptocurrencies Can Co-Exist: IAMAI

With the government planning to introduce an official digital currency, industry body Internet and Mobile Association of India (IAMAI) on Monday said that the move need not necessarily lead to a "ban" on other crypto assets.

Fiat digital currency serves a totally different purpose than the other crypto currencies in India and both of them can co-exist, IAMAI said.

The possibility of a ban on private cryptocurrencies was raised in some quarters after the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 was listed on the agenda for the Budget session of Parliament.

IAMAI said it welcomes the government's move to introduce an official digital currency.

"However, the association would also like to point out that in a section of the media and non-expert circles, it has been indicated that the introduction of fiat digital currencies is preconditioned on 'banning' other crypto assets," it said in a statement.

The organisation said that existence and use of crypto assets by Indian consumers opens up a wide scope for Indian entrepreneurs to issue such currencies and it is likely that Indians who comprise 15 per cent of the global buyers will prefer an Indian crypto asset.

A digital currency is a non-tangible currency that can be accessed through smartphones, credit cards and online cryptocurrency exchanges.

Such currencies can significantly reduce transaction cost by reducing the price of acquiring or sharing information securely, IAMAI said.

An official digital currency regulated by the government will give impetus to the broader application of the distributed ledger technology and will create avenues of fintech innovation that are yet to be explored within the country, it added.