In the past two weeks, Bitcoin and cryptocurrencies have taken the world by storm. The currency has hit $ 22,000 and is being compared to gold. Renowned investor Chris Wood announced he would invest in Bitcoin, but some media reports indicated that the world’s first cryptocurrency value could hit $ 400,000!
The warmth displayed by governments has also paved the way for adoption. S&P Dow Jones Indices announced last month that it would launch cryptocurrency indexes in conjunction with the virtual currency data resolution company Lukka in 2021. Lukka will provide data on the basket of currencies for trading on the platform. Earlier, Australia had announced integration of its stock market with blockchain. Meanwhile, crypto-exchanges have been becoming popular all over the world.
On the other hand, the initial enthusiasm for cryptocurrencies in India has now led to skepticism. RBI tried to block the system by denying banks and payment entities to deal with cryptocurrency exchanges. While the SC has kept the RBI order aside this year, there are now discussions that the government may be moving forward with a ban. There were also flip-flops from the government. A committee set up by the government wanted to regulate cryptocurrencies; however, even Senators are now leaning toward a ban on cryptocurrencies. Meanwhile, the government is trying to promote the technology behind the currency – blockchain.
Trends show that the development of blockchain and cryptocurrency often go hand in hand. China, which has allowed cryptocurrency exchanges to flourish, is also home to the largest number of blockchain startup businesses. Besides, if the government has digital tools to confirm an identity, then it doesn’t make much sense to ban their trade.
Moreover, the future of gaming also depends on these virtual coins. Although gaming in India is still in a nascent phase, it is developing rapidly, and people are spending more on gaming than they ever did. Industry growth depends on ecosystem development, which will be incomplete without a payment mechanism.
Two, the government needs to be aware of the monopoly of cryptocurrency. By prohibiting, and not regulating the service, the government gives the large companies a free hand to develop their assets. Once the market is open – a ban cannot be maintained forever – the government would have little control over the market.
If Facebook can get Libra off the ground, then given the influence it holds and its war chest, it would be too late to take any action or roll back the tide. The government has an opportunity to partner in the development of crypto. Unless he understands how the market works, he will suddenly not be able to take on the role of regulator.