What is Laxmicoin, possibly the first legal Indian cryptocurrency?

With the massive surge in the popularity of cryptocurrencies such as Bitcoin, it appears India might soon have its very own cryptocurrency, dubbed the Laxmicoin.

Originally launched in 2012, Laxmicoin has been stuck in the legal quagmire entrapping several non-fiat currencies around the world. A fiat currency is any currency that has no intrinsic physical value, but whose value is established by government decree. For example, most national currencies around the world, including the Rupee and the Dollar, are fiat currencies as their values are dictated by the government.

Non-fiat currencies such as the Gold Standard have more or less been effectively phased out, as they require adequate physical stockpiles to maintain their value. However, the new breed of digital cryptocurrencies such as Bitcoin blur the boundaries between fiat and non-fiat – they don’t have any physical value as such, but are also not government-controlled. This has created uncertainties about their role in the modern financial system.

Recently, RBI Executive Director Sudarshan Sen said that the government is “uncomfortable with non-fiat currencies”, mentioning Bitcoin as a particular example. In such a scenario, the future of Laxmicoin, India’s very own “non-fiat” cryptocurrency is quite uncertain.

If Laxmicoin does achieve the status of legal tender, it could facilitate a drastic change in the way financial transactions are conducted in India. Aside from augmenting financial and online consumer transactions, a fiat cryptocurrency would simplify PoS transactions by, for example, eradicating surcharges on card payments which would be a boon to both SME owners and customers. Also, micropayments using Laxmicoin would greatly benefit the large population of Indians who don’t have access to debit or credit cards.

The creators of Laxmicoin are hopeful of a positive outcome from the RBI’s and government’s deliberations. They have even set the date for an Initial Coin Offering (ICO) — similar to an IPO for any company on the stock market — on March 1, 2018. However the jury is still not out, and only the coming months will reveal the fate of Laxmicoin.