COST AND BENEFIT ANALYSIS OF LAXMICOIN

- THE INDIAN FIAT CRYPTOCURRENCY

PRESENTED BY- TANWI MITTAL

ROLL NUMBER- 1167
SUPERVISOR- DR. JAYITA BIT
 INTRODUCTION
• The Reserve Bank of India announced the possibility of having its own
centrally issued and controlled cryptocurrency, Laxmicoin, in the year 2018.

• While discussing the Reserve Bank of India’s potential fiat-coin, the Deputy
Governor , BP Kanungo, quoted as follows:
“...Reserve Bank of India will produce a report and they will explore the
feasibility and desirability of issuing a digital currency by the Central
Bank. These are issued by Central Banks, and constitute the liability of
the Central Banks and will be in circulation in addition to the paper
currency.”

• Such Central Bank controlled cryptocurrency , as proposed by Mr. Kanungo, are

unofficially referred to as “fiat-coins” by the crypto community. These are so
called as they closely resemble the digital form of regular fiat money, such as
Rupees.
 OBJECTIVES

• To assess the costs and benefits associated with the launch of LAXMICOIN- The
Indian fiat Cryptocurrency.

• Underlying Objectives:

 To understand the technology behind Cryptocurrency and its usefulness.

 To dig into the various types of Cryptocurrencies available in the market

and analyse the benefits it can bring to the economy.
 ASSUMPTION OF THE STUDY

• It has been assumed that the new cryptocurrency Laxmicoin will be based on
the Bitcoin Blockchain Technology as deduced from the current news bulletins.

RESEARCH METHODOLOGY
• The arrival of Laxmicoin has been evaluated on the basis of The Cost and Benefit

Analysis Technique.

• The Analysis helps businesses or evaluators to make decisions by adding the

benefits of situation or any action and then subtracting the costs associated with

the same .
 CRYPTO- CURRENCIES

BITCOIN-2008 LITECOIN-2011 RIPPLE-2012

ETHER-2015 BITCOIN CASH-2017 LAXMICOIN-2018

 LAXMICOIN-A Blessing or A Disaster

What are the benefits of having a new Indian Fiat coin?

 Laxmicoin will not be duplicated and double spending can be avoided.

 Finite number of coins will be available in the market, thereby avoiding the
inflation of the Indian Currency.

 Difficult to hack and hence secured.

 Free from risk of identity threat.

 Quick and easy payments.

 LAXMICOIN-A Blessing or A Disaster

What are the stated costs of having a new Indian Fiat coin?

 Loss of essence of the Cryptocurrency Concept.

 Suffers the same downside as that of Paper money.

 Reversal of payment is not possible.

 Cost of replacing the currency in circulation.

 The blockchain concept is not accepted worldwide.

 CONCLUSION

• The arrival of this scientific currency in the market may lead to a drastic
change in the entire economical and financial structure of India in a noble way.

• But considering the related negative impacts, the proposal requires a second
thought.

• A currency which works on the principle of cryptography will lead to

anonymous billings and payments, but on the other hand reduce the identity
threats as well as middlemen and time costs.

• The idea of duplication and double spending of money, can be decreased to a

great extent if Laxmicoin comes into effect, but if the economy has a parallel
running paper currency, its difficult to give affect to these benefits.
 CONCLUSION

• As far as the present Indian scenario is considered, we can infer that India is
developing but is yet not proficient enough to bring such a huge change in the
economy on a trial and error basis.

• The recent economic activities including major decisions like Demonetisation,

and advancement of virtual currency like Paytm, E-wallets, M-pay, etc have
carved out the way for cryptocurrency to enter the market.

• But it is too soon to bring a change in the financial structure, especially in the
form of currency, which is the blood of the financial system.
 RECOMMENDATIONS
• Laxmicoin is a very thoughtful proposal by The Reserve Bank of India and its
committee, but requires a great amount of research and pre-planning to
execute it.

• Blockchain without cryptocurrency is a half-hearted concept which will

require immense hard work and technological advancement to positively
impact the economy.

• The advancement of the economy on this foot might be helpful for the literate
and the rich classes of the society but will not be of any use to the remaining
people, dividing India into two halves- the developed India and the Under-
developed India, which is surely unwanted.

• The financial system of the country should grow in parity with the economic
system to provide absolute advantage of the improving technology.
 PROBABLE SOLUTIONS
• Ethereum Virtual Machine can be used as a software programming technology behind Laxmicoin
rather than the Bitcoin Blockchain Technology.

 Because the Ethereum Technology provides mining of more number of coins as compared to the Bitcoin
Blockchain, which will keep the availability of coins limited and at the same time, available to all.

• Currency with no third party interference should be the main motto of the Indian Government.

 Because third party interference will bring in the same loopholes as that of the currency in circulation
leading to inflation and other issues.

• To maintain the essence of Cryptocurrency, the maintenance of currency and also its creation by
the Indian Government should be removed.

 Because no Central Authority will lead to creation of a distributed trust system which forms the core of
the newly introduced technology.
 LIMITATIONS

• Indian fiat coin, Laxmicoin, is a very new ideology on which studies have been
made and conclusions have been drawn based on various assumptions.

• This study carries a similar set back in scrutinizing the implication of changing
the entire system of payments and receipts in the economy.

• The Indian fiat coin is yet a proposition and not a declaration by the
Government. So the analysis is on the assumption that the Crytpocurrency will
have similar features as that of Bitcoin.

• Laxmicoin, in realism, may be based on a different technology and not the

Bitcoin blockchain technology which possibly will require additional study and
analysis.
THANK YOU!