Recently the Prime Minister (PM) has reviewed the issues related to Crypto currency with key stakeholders.
Regulatory prospects for crypto currencies were discussed in this meeting. At the same time, there was consensus on general issues such as preventing attempts to mislead youth through over-promising and non-transparent advertisements.
Crypto currencies (Bit-coin, Ethereum, Ripple etc.) are digital or virtual currencies. Encryption techniques are used in these currencies to regulate the creation of currency units and to verify the transfer of funds.
Crypto currencies operate independently of a central bank.
Each crypto currency is controlled through a distributed ledger technology called block chain.
blockchain is a shared and immutable ledger. It facilitates the process of recording transactions and tracking assets across a trading network.
Concerns regarding crypto currency
- Lack of regulation increases the risk to macroeconomic and financial stability. An unregulated crypto market can facilitate money-laundering and terrorism financing.
- There is a lack of clarity on the legal liability of exchanges for the loss of investors. In the year 2020, the Supreme Court declared a circular of the Reserve Bank of India (RBI) unconstitutional. This circular prohibited banks from dealing in crypto currencies.
- Currently, the crypto currency is neither recognized as a legal currency by the government, nor is it regulated by the Reserve Bank of India.
Recently, the government has released the ‘ Crypto currency and Regulation of Official Digital Currency Bill, 2021’. It is mandated to lay down a framework for the creation of an official digital currency and to ban all forms of private crypto currencies in India.
Source – Indian Express