Universal Dilemma: Why Does Cryptocurrency Pose Worries?

| Updated: 20 November, 2021 7:31 pm IST

NEW DELHI: A digital mined currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transaction is known as cryptocurrency or “crypto”.

Many companies or brands issue their own tokens and currencies that can be trade specifically for goods and service.

Cryptocurrency works using a technology called “Blockchain”.

What You Need To Know:

  • There are more than 14000 cryptocurrencies in the world that are traded publicly.
  • The most popular cryptocurrencies include Bitcoin with the market capitalisation of more than $ 1 trillion, Ethereum with the market capitalization of more than $492 billion.
  • Many more cryptocurrencies exist and are performing good that include Binance coin, Tether, Dogecoin, Polkadot and many more.
  • Parliamentary Standing committee of Finance met on Monday to discuss the current status of cryptocurrencies in India, their future possibilities and opportunities. Indian government was planning to ban crypto last year but the things have changed in pandemic. The number of investors has gone up including the young generation.
  • The RBI is still not convinced about cryptocurrencies. Few days before the meet RBI governor Shaktikanta Das had said that cryptocurrencies are a threat to any financial system since they are not regulated by the banks.
  • PM Narendra Modi also held a high-level meeting last week in which it was also discussed that unregulated crypto markets cannot be let to become avenues for money laundering & terror financing.
  • Many leaders across globe have criticized cryptos and expressed their opinion in public about the same.
  • America’s former Democratic presidential candidate and secretary of state  Hillary Clinton during a panel discussion at the Bloomberg New Economy Forum in Singapore on Friday said that the somewhat exotic efforts to mine new coins in order to trade with them has the potential for undermining currencies and for destabilizing nations.
  • China has also maintained restrictions on crypto currencies. China started putting restrictions on crypto transactions in 2013 when PBOC (People’s Bank of China) restricted banks to not participate in Bitcoin transaction. Four years later in 2017 payment gateways allowing crypto were also banned. However the complete ban was announced in June this year.
  • In January this year, cryptocurrencies were declared ‘allowed’ in Russia but was not permitted to be used an exchange for goods and services. However, Russians can mine, trade and hold cryptocurrencies but using them as a payment option is considered illegal.
  • Apart from China, Egypt, Turkey, Indonesia, Bolivia have banned cryptocurrencies.

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