The Fintech industry has found itself at the forefront of this boom in an age where technological developments are occurring at an unprecedented pace. From mobile banking to online stock trading platforms, cryptocurrency is unquestionably the most desired in today’s world. In India, the uncertainties in the last year have led to a cryptocurrency boom. The popularity of virtual currencies such as Bitcoin, Ethereum, and other cryptos has skyrocketed in the last year. While people were simply just in possession of bitcoins and other cryptos, doing very few trades, since lockdown, the trades have risen up to 12% and it is predicted that they will significantly grow more in the upcoming years.
there are many people in our country who are glad about this concept, the government of India doesn’t seem to be completely in favor of this. With the government, many others also claim that cryptocurrency is not suitable for transactions and already existing UPI transaction methods are much safer. Despite the fact that the government introduced two bills to prohibit the keeping of cryptocurrencies, neither of the bills came to fruition. However, at the present date, we all can see that there exists a lack of clarity with respect to cryptocurrency regulation in India.
It certainly requires a framework with a well-structured and nuanced approach, with due respect to the laws.
With this in mind, there are a few other important things that the government needs to consider. To implement the ban, authorities would need to create an invasive surveillance system that could monitor all Internet activity in the country would take a significant amount of time, human resources, and effort, which, given the current situation, would be very strenuous. The government’s second worry would be preventing capital flight and volatility during economic crises. Cryptocurrency would allow Indians to bypass the current restrictions on capital account convertibility and invest abroad more easily. But again, protecting Indians from global volatility by banning cryptocurrency would be like making roads safer by eliminating cars.
Taking all this into account, the government’s real long-term solution could be to progressively loosen restrictions on capital mobility, making India a more attractive investment destination. Instead of criminalizing digital currencies, the government should examine India’s financial transaction restrictions and update them to reflect the changing environment. Liberalization in 1991 made India a world leader in IT. Opening up, even more, might put Indians where they belong: on the cutting edge of fintech innovation, not on the receiving end of suspicion.