Japan may soon become the first country to recognize bitcoins as legal tender. Some countries such as China could go a step further to issue their own version of the digital currency. Financial regulators continue to be suspicious of shadowy digital currencies that tend to fluctuate wildly in value—not exactly a great advertisement for those who are concerned with monetary stability.
It is still early days yet for digital currencies based on blockchain technology, but what has happened in Japan shows that they cannot be ignored for long. This newspaper had argued in July 2016 that India should consider issuing its own version of the bitcoin—a Bharatcoin. There will be collateral damage. Banks could be hurt as their payments monopoly evaporates as people can directly access central bank clearing houses. It is also important to remember that the Watal committee on digital payments, as well as the Reserve Bank of India, have both taken note of the potential of digital money in a country like India.
How long before other countries follow the Japanese cue?