What Could The Crypto Bill Mean For The People Of India?

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The hottest investment instrument these days, especially for the younger generation in India has to be cryptocurrency. Ever since Elon Musk’s comment shot up the prices of Bitcoin, people paid heed to the potential that lies in this space. However, it also exposes the high volatility of cryptos. Therein lie the risk and reward of investing in digital currencies. But how could the immediate future for the Indian people look like now that the Crypto Bill has been proposed in the winter session of the Parliament? Let us try to assess this situation from the retail investors’ point of view.

What Does The Crypto Bill Propose?

The Crypto Bill has been drafted seeking to ban all the private cryptocurrencies in India. But more importantly, the Government acknowledges the relevance and potential of the blockchain technology on which these digital currencies are based. Resultantly, there will most likely not be a complete ban on cryptocurrencies. To make things a bit more specific, the Government will categorise various cryptos as private and non-private. The giant coins like Bitcoin and Ethereum might not fall under the private category and hence, might become legal tender in this country. Many others might not make it to the list of legal tenders in India and will have to face a ban.

Uses of Crypto Currencies

The possibilities of blockchain technology, on which digital currencies are based, are too immense to even fathom at this point in time. In relative terms, this technology is still at a nascent stage. The modern world is only beginning to comprehend the vast scope of applications it could offer as time evolves. At its core, the transactions involving cryptocurrencies are anonymous, transparent and decentralised. This essentially means that you are not required to go to any mediators like the traditional banks in order to transfer money to someone. This takes the power away from the banks and gives it to the actual users.

This would mean that you could save a ton of money as commissions that the banks used to take for every transaction. Also, this technology is an algorithm based and no human involvement is there. This means that the transitions will be devoid of any human error and will be completely transparent. This process would be much secure than the orthodox methods because the digital footprint of every transaction will be stored in millions of servers around the world and can’t be deleted. Such payment will be independent of country or time and would be completed in a matter of seconds. These are a few of the many advantages that cryptocurrencies offer.

Challenges with Crypto Currencies

Admittedly, no new technology comes without its own share of flaws. At the end of the day, blockchain is a technology. This means that in the wrong hands, it could turn destructive as well. Since we don’t even fully understand the applications of blockchain yet, it is a bit difficult to know what could go wrong. However, this is true with everything in the world. People who want to misuse any technology or system will keep on doing it anyway. This is not something specific to just the crypto world. The more important challenge comes when people start investing in cryptos. This world promises unprecedented growth potential. At the same time, the fall in the crypto world is also like no other asset class as we have seen recently. This extremely high volatility makes it a dangerous investing instrument and people could easily lose their hard-earned savings if they follow their greed.

Also, it will take quite some time before currencies like Bitcoin and Ethereum become universal in the sense that they start being accepted everywhere replacing the fiat currency as we know it.  The people who are making legislation for regulating cryptos are also not completely aware of the technology and its implications in its entirety. Many Governments around the world are coming up with digital versions of their own currencies to offer the same benefits to the users as other cryptos. This might challenge the existence of cryptos in the first place.

Possible Solution To The Crypto Issues

While it is mandatory for Government to discuss the legality and usage of digital currencies and blockchain technology, it might not be prudent to ban it completely. The Government has realized how interested people are in this world and consider it as a serious investment tool, taking it away from the people totally might mean losing a healthy chance to boost the economy. The Government should regularise it to some extent with a basic framework. This would encourage a ton of Indian people to invest in Cryptos and the government could start earning taxes on the returns that the investors get. In this way, both, the government and the people could stand to benefit from this future-proof technology which could prove to be vital in other aspects of modern applications in times to come.

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