Cryptocurrency in India – Perspective Analysis

   2019-12-16       56        Finance
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Cryptocurrency in India has always been a hot topic of debate because of the perspective people have about it. The rapid growth of cryptocurrency cannot be neglected anymore
Need for legal Supervision
  • Today there is the absence of legal regulations for cryptocurrencies, that safeguards financial institutions and markets, such as financial reporting, third-party audits, and disclosure, prevention of insider trading and proper infrastructure of security and all of this reflects as a risk for the retail investor when unestablished.

While many crypto exponents argue that cryptocurrencies should not be put under regulations, as the technology is decentralized, but various aspects such as exchanges, governance around the issuance of new tokens, and marketing are highly centralized in nature, requiring standardized oversight to prevent and punish illegal activities. If checking is neglected, their volatility could represent a risk to the health and stability of the economy, particularly for developing countries. So cryptocurrency in India is a topic of concern from various different aspects.

Further, concerns over misuse of the technology to fund various mal-functions such as terrorism, trafficking, and drugs make it imperative for regulators to step in and enforce controls.

  • Digital currencies by Central bank

The capability of cryptocurrencies to make transactions and payments faster, less expensive and more secure has attracted several central banks to effectively experiment with them. Both the Bank of England and the People’s Bank of China have already published statements that they will be launching their own digital currency.

Central Bank Digital Currencies (CBDC) could be a relevant substitute to reduce the necessity for cash, which is the only other retail form of central bank money in circulation. Further, in a nation where a majority of the population is still very far from banks, the introduction of cryptocurrency in India won’t be that easy. But it can also have positive impacts as financial inclusion could rise as one of the major benefits of CBDCs. The Committee on Payments and Market Infrastructures and the Markets Committee, comprising of representatives from more than 15 central banks including the Reserve Bank of India, published a joint report identifying different types of CBDCs and commenting on their implications for monetary policy and considerations for financial stability.

  • How bitcoin and digital money are challenging the economic order

The world is still divided into two parts when it comes to bitcoins and digital money, one that is supporting it and has accepted it in their economy and the second one is not yet ready to accept it. But in both the cases bitcoin and digital money are challenging the economic order of a country. Inclusion of cryptocurrency will lead to change from start to end of a process and it can affect the economy from within whereas it cannot be neglected anymore, so the co"

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