Should India Legalize Cryptocurrency?

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Cryptocurrencies were one widely underestimated targets for investment in the late 2000s. Today, we hear many stories of common people turned millionaires because of their investment in a cryptocurrency. Let me tell you, most of the stories are true because cryptocurrencies have certainly created a marketing bubble due to it‘s reliability and ironically it’s unreliability and captured the headlines in this era which promotes freedom and innovation.

DEFINITION

Cryptocurrencies are digitized, decentralized currencies which are used as a medium of exchange. A feature that distinguishes them from any other currency lies in it’s name. A cryptocurrency uses cryptography as security.

Another feature that distinguishes it from other form of currencies is it’s decentralized character. A cryptocurrency is not controlled by any government or national or international banks.

ADVANTAGES

  • Any transaction through cryptocurrencies does not reveal the personal details of the sender or receiver. What is disclosed is only their public key which is again a code which signifies the address to which the sender has to transfer the money. Thus , this form of exchange seems really convincing for people who value their privacy.
  • A cryptocurrency uses cryptography to secure the virtual wallets and crypto exchanges.
  • There is no middleman in a crypto transaction. So, a party does not have to wait until morning for their transaction to go through as they earlier had to do through banks.
  • Cryptocurrency transactions use a technology known as block chain. It is complex but, in brief, it is an incorruptible system, as claimed by the proponents of block chain, that allows for the establishment of an authentic record of the transaction.
  1. Some proponents of Cryptocurrencies claim that the system can probably be corrupted only if the cryptocurrency is centralized as all a hacker needs is all Bitcoins at one place so that he can hack the entire central authority holding the cryptocurrency.
  • Reiterating a point again, cryptocurrencies are not subject to regulation by any public authority like the government. Thus, this is a very convenient way for those who dislike disclosing information to the government.

IS CRYPTOCURRENCY ALL BENEFIT?

The points directly jump to the conclusion that cryptocurrency is really all good and no bad. The private sector had wished for something like this to pop up for they love to stay out of the vigilance of the government or for that matter of fact any central authority.

However, a preeminent argument against cryptocurrencies, inter alia, was the promotion of terrorism through crypto exchanges. Governments of the world are putting in a lot of effort to curb the funding of terrorism. The last thing they would hope for is a technology that would totally wipe out any evidence of such funding to any militant organizations .

Apart from promoting terrorism, Cryptocurrencies would promote corruption, black money, money laundering, theft, murder and almost everything because no authority or no one else can know how much money in Bitcoins does a person hold at any point of time. This will setup a whole new world, a separate world of illegitimate, illegal money holders and money “getters” who promote all such activities and the authorities will never be able to track them.

HOW WOULD IT TURN OUT FOR INDIA?

Indian Prime Minister Narendra Modi highlighted the necessity of a cashless economy. He said so because a cashless economy would help keep records, hence reducing the existence of black money and demoralizing corruption. A cashless structure would keep a digital record of every transaction no matter how small or big.

IS CRYPTOCURRENCY THE FORM OF CASHLESS ECONOMY INDIA WANTS?

Probably not. After the attacks in Mumbai, Pathankot, and the ever rising number of militants in Kashmir might make the ministry think twice before legalizing cryptocurrencies in India. Surely, cryptocurrencies provide the amount of freedom that individuals want in this era , but the decision that our government will have to make is whether they would want to go for freedom of an individual or security of the nation. In addition to this, it is very easy to convert black money into cryptocurrencies and the identity of the holder will never be found.

SEVERAL CASES

  • A woman in the United States of America allegedly collected $85,000 in cash through loans and credit cards and converted them into Bitcoins. She then made transactions to Pakistan, China and Turkey. A US prosecutor claimed that these transactions were motivated to benefit the Islamic State as she was held without bail.
  • The Enforcement Directorate alleged that about 8,000 investors lost about Rs. 2,000 crore funds by transacting in this scheme. However, the government declared these as Ponzi schemes and they have no protection.

CONCLUSION

Agreed, that cryptocurrencies are a step up towards the future, but the grass is always greener on the other side. The technology that the cryptocurrencies use, block chain, is the core in the concept of cryptocurrency. Many governments have totally legalized cryptocurrency like the USA. Some have banned it, like Bangladesh. India however has refused to take a stance on this issue, maybe to see the effects in other countries. Nevertheless, India has promised to take a step ahead in technology by researching on block chain, and using this technology in other fields such as health care, etc. Sooner rather than later, we will witness the the change brought about by these cryptocurrencies, more implicit rather than explicit.

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