The government is taking a sudden interest in cryptocurrencies, the bill of which is likely to be tabled in Parliament soon. Now it will be important to see how the government presents it and strikes a balance.
The cryptocurrency is interfering in the affairs of the country, the first direction of which is the immediate and forced withdrawal of all advertisements of the players of this brand new and hardly considered industrial segment. Another rule is that India can ban the use of cryptocurrencies for payments, but can allow and regulate their trade as assets. Reports also suggest that the authorities now intend to introduce a ‘Corruption Regulation Bill’ in the winter session of Parliament starting November 29. The contradiction is that this is a good thing, if only because the move has rewritten the government’s thinking about a complete ban on the sector.
What is cryptocurrency?
Simply put, it is a form of payment that is exchanged online for goods and services. Where all and sundry companies are. When they were last counted, their number was about 13,000.
Who have issued their currencies and called them ‘coupons’ or ‘tokens’ that can be traded for the goods or services provided.
People who want to use cryptocurrency have to pay for it in real money. In India it means real rupee.
How big is the corrupt currency market?
Yes! This can be estimated from the fact that this market is already worth US 2.5 2.5 trillion worldwide.
At the end of October this year, the value of all cryptocurrencies was staggering, while the most popular digital currency, bitcoin, was valued at 1. trillion. How does a corrupt currency work?
This is done using a technology called ‘blockchain’, which is spread across computers and manages / records any type of transaction and transaction on the platform.
Advertising has been banned for beginners, which basically means that we will now be able to watch Indian cricket matches without having to sell our equipment to new cryptocurrency companies once every six balls are over. But as mentioned, corrupt currencies will not be banned, perhaps because it is a major source of income.
Sources said that the Securities and Exchange Board of India may be called upon to act as the regulator of this growing industry. The government is also considering levying one per cent tax on all transactions. The Indian cryptocurrency market is already around US 7 7 billion, which is not a small amount, which is equivalent to an immediate Rs 500 crore, plus change. You ask why ads are being banned? Well, the main reason for this is that most of them offer huge profits, “up to four times what you get from a fixed deposit (FD) account”, “claims some advertisers. ۔ These financial difficulties will go away while some people think that it leads the people astray.
Because it offers about 5% profit per annum, of which profit is taxable. The promise of a 20% return has been sent by God at such times. The issue of cryptocurrency in India is so hot that it has been reported that the Prime Minister has recently chaired a meeting to determine the fate of this industry in the country. Corrupt markets can be a source of funding for money laundering and terrorist activities. In addition, the government held back-to-back meetings with representatives of the crypto industry last week, shortly after discussing the industry with the Reserve Bank of India.
What does the RBI say?
One difficult twist here is explaining what cryptocurrency really is as an asset class. The RBI seeks to address burning issues such as financial stability, capital control / accountability and exchange rate risk. The central bank is also concerned about how any arbitrator can keep a projected score of a corrupt exchange when prices fluctuate widely and there is an opportunity for arbitration.
In fact, in 2018, India banned all corrupt transactions, but the Hon’ble Supreme Court lifted the ban in early 2020. However, the RBI is still moving towards formalizing the corrupt currencies, the main reasons given. Governor Shakti Kant Das has officially said that India needs a deeper dialogue on the issue of corrupt currencies.
When the central bank says it has serious concerns about macroeconomic and financial stability, there are serious issues. He pointed out that we have not seen any serious or informed discussion on these issues in public. However, this opportunity is so great that it cannot be ignored. Maybe that’s why the RBI is now apparently working on digital currency, so strict rules should be imposed on cryptocurrencies. This is as much about protecting the revenue collection for the exchequer as it is about ensuring that India’s household savings do not go down a new and yet unverified path.
So what is the moral lesson of this story?
The easiest thing to do is to be careful, but don’t be so careful and strict that we bring in regulations that sound the alarm for new startup units.