Indian authorities reportedly fancying enticing “Lakshmi” in digital cryptocurrency; a legal variant to the pariah – bitcoin and ethereum, running it in blockchain variation technology and subject to same capital account controls that of INR on cross border transactions. A billion dollar question: would you fix a price (exchange rate/relative price) or allow Lakshmi to free-float? Wouldn’t blockchain method conflict with fractional reserve system of money supply? Would you tie it to INR or US$ but with implied volatlity in INR ER or enforce strict regulatory controls that of Japan and South Korea to prevent free for all transactions infuriating capital flight and speculative (store value) binge?
Interestingly, as epics suggest, “nimble fitted” Lakshmi is the most “secular” of all God(es)s; neither racist nor casteist! Interestingly it loves to stay as “wealth” in the hands of those who quickly dispose the cash for-trade! Are control-freak policy authorities then coming to terms with changing digitised financial landscape or fancying enticing Lakshmi but for a capital flight to La La Land.
Professor D. Tripati Rao
M.Phil (JNU), Ph.D. (University of Mumbai)
Professor of Economics
Business Environment Area
Indian Institute of Management Lucknow
Further reading: http://www.business-standard.com/article/economy-policy/govt-considering-its-own-cryptocurrency-117091600051_1.html