Monitoring the Cryptocurrency Craze – Regulatory UncertaintySeptember 18, 2019
Cryptocurrency consists of the likes of Bitcoin like Litecoin, Ethereum, and Ripple. As a medium of exchange over the internet based on decentralization, transparency, and immutability cryptocurrency are being used to conduct financial transactions.
At the current moment, Fintech companies are working towards making it easier to use cryptocurrency. It is currently not regulated, and high profile commercial outlets do not accept it yet. However, Apple has authorized nearly ten different kinds of cryptocurrencies as one of the viable forms of payments in its App store.
There are gambling sites that deal with the only cryptocurrency. There are some well-established sites which are already reputed and are considered secure. When such sites accept cryptocurrency, it provides a sense of security. When people have to decide between cryptocurrency site and a site where fiat and cryptocurrency are approved, they choose to go to the site which accepts fiat and crypto rather than the cryptocurrency only site.
The risk exposure is considered to be the major downside with cryptocurrency. The values of the cryptocurrency rise and fall in just a few minutes or hours literally. Therefore, the volatility factor makes it difficult for users and merchants to use this kind of currency for value exchange in commerce.
Regulatory uncertainty makes it hard to deal with the crypto. In India, the cryptocurrency industry is in the throes of uncertainty. The apex court of India has required the RBI to respond to the industry players concerning their petition filed versus the banking ban concerning the cryptocurrency. The RBI has been forever monitoring the cryptocurrency craze in the market.
The RBI has been long unsure of how to regulate it, and none of the Bitcoin millionaires of 2017 were from India. Primarily, India warned against Bitcoin usage, and on April 2018, it banned cryptos by preventing banks from processing crypto transactions.
‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019′ intends to ban the use of all private cryptos and suggests a blockchain-based central bank digital currency for India.
intends to ban the use of all private cryptos and suggests a blockchain-based central bank digital currency for India.
Investors consider it as an avenue to diversify risk. Governments are focusing on the ban because they want to prevent terrorism funding, drug dealing, and money laundering using cryptocurrency.
The best interest of most governments is related to similar reasons. As an alternative to banning the governments should consider implementing stricter trading rules, taxing trades and transactions and a range of other approaches. A total ban would only deprive the population of the inherent benefits.