Is India also going to be on the list of countries to regulate crypto-currency to bring stability and security in the market?

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‘Cryptocurrency’ is trending a lot nowadays. What exactly ‘Cryptocurrency’ is? In the words of Indian economist Amit Singh, ‘A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. In easy way, it’s a no-physical digital coin which cannot be used for transactions for spending on goods.’ Indian administration is about to introduce a Bill in the winter session of Indian Parliament to regulate cryptocurrency. Agenda of The Cryptocurrency and the Regulation of Official Digital Currency Bill 2021, got released on the official website of Lok Sabha (Lower House of the Parliament).

According to the information, for about 1,50,00,000 crore people in India have cryptocurrency. The value of those cryptocurrency is estimated nearly hundred crores dollars. The Bill has the proposal to put restrictions on private cryptocurrency, details provided on website. ‘Public cryptos are those which run on public blockchains with publicly available verifiable transaction history on the blockchain ledger,’ says experts. Bitcoin, Ether and Tether are the examples of public cryptos whereas private cryptos are the ones that are not given out from the administration or Reserve Bank of India. Since private cryptos can be deal for various secret activities, administration is trying to restrict it under certain regulations.  

 Administration doesn’t want to act oblivious and has to fastened the decision, as they are going to take suggestions and advices. According to the information given by sources, feedback from RBI (Reserve Bank of India) will also be considered, to keep a check, to avoid money laundering and terrorism funding. On asking why people are moving to crypto-market, Economist Amit Singh said, ‘Firstly, it’s a high risk and high return thing which attracts everyone and plus its easy to manipulate the crypto-market. Specially among the few richest business men that can easily influence the market and it has happened in the recent times too, for the case of doge coin when Elon musk tweeted in favor of the coin. The factors or basic principles that the crypto-currency run on are     1) Reach. 2) High return. 3) Easy to invest.’

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India has reached a cryptocurrency crossroad. According to a report by cryptocurrency research firm Chainalysis, Indian market is considered as one of the biggest cryptocurrency markets in Asian region and has rapidly expanded. The growth recorded 641 per cent from July 2020 to June 2021. ‘The Indian market was affected in a huge way and seeing this demand of cryptocurrency in India, many mobile applications and internet platform were made so that anyone can invest in the same. Now people are shifting away from purchasing commodity money and fiduciary money since they do not tend to give as much return if we compare to crypto-currency,’ said Amit Singh. Adding to his statement, ‘And the majority of the investors in crypto are the young generation of this nation, as many so-called social media influencers tend to market about it on their channels/accounts which are majorly followed by the young generation. There is still less knowledge or insights about the crypto among the people of this country which is required in any type of investing.’

The regulation Bill is going to be beneficial, according to Amit. He told Eat News, ‘Many big investors maybe against it because it will tie their hands in manipulating the market which is good and secure for small investors. The crypto-currency have many illegit coins which are a scam just to raise money for a short term and many loose their money too. the administration is aiming to protect the investors from them and hence bring stability and security in the market. The main reason of India not being affected in comparison of magnitude that other developed nations faced during the 2008 financial crisis is because of market laws which secures stability and administration intervention at a correct time. Same with the case of IIFL 2018 crisis which could have distorted the Indian market but it did not because of administration intervention.’

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India is not the first country coming up with the regulation on crypto-market.  China has banned trading and mining of crypto-currency and deals in its own digital currency. In 2017, Nepal announced trading and mining of crypto-currency illegal. Russia, Vietnam, Ecuador, Egypt, Iceland and Iraq are some of the countries that does not support crypto-market without conditions. ‘Safety of the country’s investor and as well as protecting the economy, that’s the major priority of any country until and unless a crypto brings money inside a country as investment,’ opinion shared by Amit Singh.

Although digital currency is something new in India and people are relishing the concept. A survey conducted by local circles for taking opinions on the Regulation Bill of people, 51 per cent of Indians want India to adopt digital currency. 12 per cent people trust crypto-currency, and 49 per cent people thinks that crypto is not trustworthy. ‘Even Mukesh Ambani has shown interest in the crypto market and they know that they have the money and the people followers to make them even richer. Again, not many people know how the crypto market functions. All they know is that they will get high returns which is a dangerous concept. Because the greed is not the only need but the knowledge feed is also necessary for making it sustainable for long run performance return’, said economist Amit Singh.

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Shefali Ranawat is an Eat News correspondent in India. She want to be the voice of people. Also, she aim to be a war correspondent.

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