With the RBI's decision to ban banks from handling cryptocurrency exchanges, the Indian crypto community is worried about its future. However, there's one state in India that's showing a unique path. Kerala has emerged as a crypto-friendly state in India and this might be the beginning of something big.
The Kerala government has decided to line up its own cryptocurrency exchange and it'll allow people to pay their taxes using Bitcoin. In fact, the govt is even reaching to launch its own cryptocurrency called 'Lakshmi'. The state of Kerala has also partnered with an Israeli company for developing blockchain technology solutions for governance.
In an interview with Coindesk, Shailesh N Kuthiala, the Secretary of IT & Industries at the govt of Kerala said: "We are looking at blockchain as a policy framework for all financial transactions." He added: "The idea is to create a platform where we can implement use cases across sectors."
Kerala's IT minister M A Baby told media outlets that his government was inquisitive about exploring blockchain technology for land records and provide chain management. He said: "Blockchain will ensure transparency in land records which is able to help us curb frauds."
According to reports, about 40 percent of the population in Kerala are below the personal income and that they are still ineffectual to induce access to banking services. This makes them liable to scams and frauds. Blockchain technology can help them by providing digital identities and help them build credit history through loans given by microfinance institutions (MFIs).
Kerala's e-literacy rate is high compared to other states in India and this makes it easier for people here to grasp cryptocurrencies and blockchain technology. The state also has many IT professionals who are performing on blockchain projects abroad like Vitali Butlerin who created Ethereum while he was living in Toronto, Canada or John McAfee who founded McAfee Antivirus Software while he was living in Belize City, Belize.
Kerala is additionally home to a number of the most important Bitcoin mining farms in India. These farms are mostly based within the state's capital city of Thiruvananthapuram and Kollam.
The cryptocurrency community in Kerala is hoping that this may give them a grip over other states in India when it involves blockchain technology adoption. The government has also been engaged on a project called 'Kerala Blockchain Academy' which aims to coach people about blockchain technology and cryptocurrencies.
So if there is a federal ban on cryptos can one state make their own rules and unban cryptos in their state?