Cryptohelpexchange: Cryptocurrency and its scope in India
The very first-time Cryptocurrency came in the form of bitcoins in the year 2009 but the technology behind it is even older. However, it became a high trend in recent years. The decentralization manner makes the process authority proof this is the reason why the government is not in support of Cryptocurrency.
"Cryptocurrency has proved to be a trustworthy investment due to its nature because the investors were able to make profits even when the world goes down. For example, in the case of the worldwide pandemic COVID-19."
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Snapshots
- "Whatever happens to Bitcoin, other Cryptocurrencies are gaining ground and more respect."
- “If you like gold, there are many reasons you should like Bitcoin.”
- "The blockchain is an incorruptible digital ledger of economic transactions"
The government and the Reserve Bank of India (RBI) are not supporting Cryptocurrency so all its features of it are of no use. The Reserve Bank was giving circulars to discourage the crypto investors for some time until it decided to ban all its entities from supporting cryptocurrency transactions. This circular was put aside by the honorable Supreme Court of India as it was found disproportionate.
This time it requires an affirmative framework that is supported by both the Reserve Bank of India as well as the government. Because cryptocurrency is here to stay to make a profit for a long time and it cannot be banned absolutely. So, why not regulate it.
Introduction
A virtual currency, based on Blockchain technology and the type of currency works on cryptography. It is decentralized so that no authority can regulate and control it.
Cryptocurrency and its types are increasing regularly. There are over 4000 cryptocurrencies as of early 2021 but it is believed that the top 20 cryptocurrencies carry the market share up to 90% worldwide. There was a trend when people used to invest in gold as an asset to protect their money against inflation but the choice has been changed. Over the past couple of years, more people found Bitcoin to be a better substitute for investment. Even institutional investors and big businessmen are converting their cash into Bitcoin to protect their finances against inflation and get a more stable profit.
Who Can Purchase Cryptocurrency
An individual or a corporate entity, anyone can purchase Cryptocurrency. There is no restriction behind registration and purchasing.
How to Earn Cryptocurrency
Cryptocurrency depends on the term cryptography which means tackling codes or to produce a key for any encoded program. The money is taken cover behind the encryption which must be seen through a key. The interaction to get to this key is called mining.
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Mining is difficult as it sounds. It truly is a hard method for acquiring because an individual should utilize a computer system, a steady high web association and hard work joined with a touch of karma to settle the encryption.
One more method for acquiring cryptocurrency is to simply pay for it. An individual can pay for it to the people who have a cryptocurrency and will give it for genuine cash. Ultimately an individual can acknowledge the installment of Digital currency for any sort of services given by him.
Risk absorbed with Cryptocurrency
Cryptographic money is not entirely settled by the worth that market members put on them through their Exchanges, and that implies that deficiency of certainty might achieve a breakdown of exchanging exercises and unexpected drop esteem. Since Cryptocurrencies are not supported by any bank or association hence assuming that it goes down everything goes down.
The world is changing around; criminals have also become familiar with modern ways. The number of cybercrimes is increasing each day and with the increase in the trend of Cryptocurrency, it is quickly becoming a hotspot for them. They are targeting the big players of the market like a businessman, Entrepreneur, Service Providers, etc to cover the larger economical part of the world. Also, it is very difficult to catch the culprit, and once they get their hands on the keys to the wallet, and can use and own it like an owner and accountable.
If the keys to the account are stolen, lost, or deleted, then there is no way to get the Cryptocurrency back.
The feature of Bitcoin is its complexity and decentralized nature, that’s why Government prevents the use of it by convincing people through its negative features.
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High-Risk High Gain Proposition
Cryptocurrency arose in the year 2009, assuming an individual would have put even 1000 rupees in them by then of time. Yet, presently the worth of Cryptocurrency is as of now exceptionally high and from here it is possible that it can go as far as possible or it can crash. Financial backers can not depend on any authority since there is no authority behind the exchanges of digital money or to manage it. The cost of digital currency is an exceptionally fluctuating one and it is close to difficult to forecast the conduct of the market.
Risk of illicit activities
Cryptocurrency works at cryptography which guarantees security and secrecy to the exchange. Be that as it may, this component is extremely perilous with regards to fear financing, pirating, tricks, and other tax evasion acts. Since it is extremely challenging to track down the source and other fundamental subtleties because of the encryption.
Impact of COVID-19 on Cryptocurrency
Millions of people died and every person was affected due to the pandemic. It is a highly communicable disease; therefore almost every country in the world proposed lockdowns due to which people were working from home. During this pandemic, financial markets went unstable as no one could have predicted. But the surprise which arose was that Bitcoin was still stable and fully-fledged during the period. So the impact of COVID 19 has proved the features of cryptocurrency.
Reserve Bank of India
The Reserve Bank of India (RBI) has always showcased the key risks involved with the ownership of cryptocurrency. But in 2018 Reserve Bank took a key step by banning the use of its regulated entities by giving support to the transactions related to cryptocurrency.
Causes for the ban by the Reserve Bank of India
The Reserve Bank is responsible for monetary stability and credit framework in India. It additionally oversees unfamiliar trades under the Foreign trade the executive's act, 1999. There were countless tricks connected with cryptocurrency forms of money in the market. These scams are raised further by the demonetization in India. Ponzi plans are likewise one reason for this financial boycott. Ponzi plans are essentially tricks in which premium is paid to the previous financial backers by the cash contributed by the later financial backers.
Intercession of the Supreme Court
Wronged by the limitation forced by Reserve Bank, the Internet and Mobile Association of India recorded a request scrutinizing the legitimateness of the round given by the RBI. Before long, one more request was recorded by the corporates keen on managing cryptographic money alongside not many individual traders.[4] The case was documented in the year 2018 under the name of Internet and Mobile Association of India v. Save Bank of India.
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For this situation, it was contended that the round of the Reserve Bank forbidding its auxiliaries was against the crucial right to rehearse any calling or to continue any occupation, exchange, or business given by Article 19(1)(g) of the Indian Constitution.
Their primary contention is that Reserve Bank has surpassed its force of administrative structure of the RBI Act or Banking Regulation Act, 1949, as it doesn't lie under the ambit of credit framework or installment framework under the Payment and Settlement Act,2007.
The court saw that the RBI neglects to control a solitary occasion where the trade of cryptographic money has affected elements like nationalized banks/booked business banks/agreeable banks/NBFCs straightforwardly or in a roundabout way managed by RBI.
The court on March 4 set aside that circular as the court found it disproportionate. Additionally, the court observed that the RBI didn't consider the accessibility of choices before giving the circular.
Government’s scheme regarding Cryptocurrency
Stand of Indian government had clarified that they will consider cryptocurrency as a legal tender. At the same time, they are convincing the audience not to invest in it. There was a banking ban held on cryptocurrencies from July 2018 to March 2020 for a longer period by the Government of India.
A committee was formed to study the use of cryptocurrency and precautions, measures, or regulations to be taken. The committee sent its report on 28 February 2019 recommending the prohibition of all private cryptocurrencies, except any virtual currencies issued by the state.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 (ODC Bill) have been proposed with the target of making a facilitative framework for the creation of the official digital currency to be issued by the Federal Reserve Bank of India (RBI) and prohibit all private cryptocurrencies in India. However, it'll support and use underlying cryptocurrency technologies.
The present situation of Cryptocurrency in India
Currently, no law can ban cryptocurrency in India. So it is perfectly legal to own and trade in cryptocurrency. Banking entities were asked to not support crypto transactions but that circular of RBI was set aside on March 4 by the Supreme Court and no regulation or legal framework is guiding Cryptocurrency up to this day. It should also be noted that it is not legal tender. Legal tender is mentioned in section 26 of the Reserve Bank of India Act, 1934.
What can be done?
In India, we need a set and defined regulatory framework the way other countries have. Whoever has invested in Cryptocurrency is waiting for the profit but the government is not intending them to continue. The government needs to acknowledge that this could be the tool the Indian economy was waiting for. Instead of focusing on the positive side, the government is only looking at the negative side of cryptocurrency that it could be used for illicit activities like money laundering and terror funding but they don’t see the possibilities that these can control these drawbacks by bringing a framework to control the use of cryptocurrency.
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