India faced various economic challenges to make itself reliant and less dependent upon other countries in tackling the new aspects of the economy. In the 21st century, one terminology is vividly taking place in the market economy, known as a cryptocurrency. Read the Future of Cryptocurrency
Before we go deep into the topic, we need to ask ourselves: Is it mandatory to move towards digital currency? How much these new dimensions will help India’s GDP growth? are investors taking an interest in cryptocurrency, and if yes, we have to understand with a deep synthesis why and what is the future of cryptocurrency?
What is cryptocurrency?
Cryptocurrency is a medium of exchange in the form of digital currency. Specialists in cryptocurrency use encryption techniques to control the creation of money and verify the medium of exchange. The cryptocurrency was introduced in India in bitcoin in 2009, but it’s gained popularity in recent years.
According to the cryptocurrency market, Bitcoin and Ethereum are the world’s best-known cryptocurrencies. People invest a lot of time in front of their computers to manage and solve the complex cryptographic puzzles, and because of that, a Bitcoin transaction succeeded, so the thing is, why are they doing such complex work?
To solve those complex puzzles, those systems get rewarded with bitcoin. This process is known as ‘mining.’
At the back, this technology is called ‘blockchain.’ The revolutionary factor in cryptocurrency is that it works decentralized.
Note; The term decentralized means that no authority is there to control and regulate it.
If cryptocurrency works in a decentralized manner, why are people keen to invest in it?
Money against inflation
Earlier, people saved their money to either invest in gold or the land, which became an asset for them and a reliable source of saving. In this digital era, people are investing their money into bitcoin for a good amount of profit.
In cryptocurrency govt. It still does not come with any powerful law, and hence investors are investing in it, and it did not have any provision regarding taxation policy.
future of cryptocurrency
As a democratic nation, India possesses the federal parliamentary form of government in which the roles of government have been divided into executive, legislative, and judiciary bodies. Each of them possesses certain roles and has power in the economic paradigm of the country.
In cryptocurrency, the Indian government, along with RBI, has given a few statements and speeches.
India’s fate over cryptocurrency is ambiguous. Neither investor nor government is sure about it because, at the same time, cryptocurrency has the potential for good profits along with the dangers of gambling.
Bitcoin, which is a popular cryptocurrency, has made a profit in the market from its start to till now.
According to Shri T Rabi Sankar, deputy governor, reserve bank of India told, on the 14th of Feb, 2022, at the Indian Bank Association 17th Annual Banking Technology Conference and Awards about cryptocurrency and its acquisition of the market.
The basic arguments being made for regulating cryptocurrencies are as follows:
Should cryptocurrencies be permitted and regulated in India?
>Blockchain or Distributed Ledger Technology is a promising technology where Indians might have a global edge. Banning cryptocurrencies would affect the absorption of DLT technology in India.
>Most major countries are not banning cryptocurrencies but are considering some kind of regulation.
>Many Indians have already invested in cryptocurrencies and banning them may lead to wealth loss for them.
>Banning, in any case, is unlikely to be effective because, by its very nature, cryptocurrencies can be acquired and traded anonymously.
The Indian government and its plan to ban cryptocurrency in India
The Indian government has come up with a plan to ban cryptocurrency in India, so it became very important to figure out the pros and cons of the cryptocurrency as the market depends on governmental laws.
Arguments for banning cryptocurrency in India
>As cryptocurrency worked in a decentralized manner, it has made the government insecure about the financial market. Govt understood that this cryptocurrency world has a philosophy of evading governmental controls.
>govt knows cryptocurrency is not amenable to definition as a currency, asset, or commodity; they have no underlying cash flow, no intrinsic cash value, are akin to a Ponzi scheme, and may even be worse.
>people and even system can use it as a gambling method hence govt want to ban it.
Indian govt on neutral parts
As we all know, cryptocurrency has a few disadvantages for the govt, but on the same page, it has advantages for the revival of the Indian economy.
Regulation has changed the cryptocurrency world from an outright ban on cryptocurrencies in 2016 to an upcoming bill for cryptocurrency.
The upcoming cryptocurrency and Regulation of Official Digital Currency Bill,2021, differs from earlier.
Currently, there is no regulation and ban on cryptocurrency in India.
India has a very progressive government and always pushes the market favoring the Indian economy. Hence it is predictable that cryptocurrency has a bright future ahead. It needs the abolition of ambiguities and the regulating body and stability in the market to decide its fate.
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