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Why don't Indians continue to use the 1000 rupee notes? They can still be used so long as they are not forged or totally damaged and people are still willing to

Why don't Indians continue to use the 1000 rupee notes? They can still be used so long as they are not forged or totally damaged and people are still willing to accept them. If there is trust they can be used just like bitcoin. A group of entrepreneurs can create a database of 1000 rupee notes and their owners just like normal banks and destroy them afterwards if they so wish. All the owners have to do is to make transfers between the accounts and they should be fine. So long as there is trust and reliability what could go wrong, and how would that differ from Bitcoin? What stops people from creating a Bitcoin type currency based on unwanted 1000 rupee notes? By the way isn't the amount of 1000 rupee notes in circulation exceed the total value of all Bitcoins creatable?

WWKong 10y ago
Because without it being a legal tender it is just paper. Are you thinking it will at least be a standard looking paper with unique serial number? That is plausible, but then there is no one to check/enforce counterfeit notes which will flood the system.
- vfclists 10y ago
  The term legal tender is practically a meaningless term. It just means that the government forces you to accept it. You also forget that electronic money is basically counterfeit money which gets devalued when central banks print more money. After all if central banks "print" more electronic money are there any serial numbers on the "notes"? Which is why I added the point after the notes being destroyed once they entered the Bitcoin type system. Of course an institution taking in the notes would have the ability to check if they are counterfeit or not, not to mention that some central banks are unable to detect counterfeits of their own currency. Lets be honest, how capable are the banks of detecting that old 1000 rupee notes being deposited with them are not counterfeit? If anything the new currency created from old 1000 rupee notes would hold its value better in the long term compared to the rupee term as there is only a limited amount of them in circulation.

WWKong 10y ago

Because without it being a legal tender it is just paper. Are you thinking it will at least be a standard looking paper with unique serial number? That is plausible, but then there is no one to check/enforce counterfeit notes which will flood the system.

vfclists 10y ago
The term legal tender is practically a meaningless term. It just means that the government forces you to accept it. You also forget that electronic money is basically counterfeit money which gets devalued when central banks print more money. After all if central banks "print" more electronic money are there any serial numbers on the "notes"? Which is why I added the point after the notes being destroyed once they entered the Bitcoin type system. Of course an institution taking in the notes would have the ability to check if they are counterfeit or not, not to mention that some central banks are unable to detect counterfeits of their own currency. Lets be honest, how capable are the banks of detecting that old 1000 rupee notes being deposited with them are not counterfeit? If anything the new currency created from old 1000 rupee notes would hold its value better in the long term compared to the rupee term as there is only a limited amount of them in circulation.