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Cryptocurrency – Economy at Risk or Ladder to Economic Growth
- Cryptocurrency, a mode of earning virtual digital assets, operates without central banks, depending on blockchain technology for secure transactions.
- In India, the history of cryptocurrency has been turbulent, from bans to regulatory uncertainties and increased interest in cryptocurrencies like Bitcoin.
- The adoption of cryptocurrencies in India has seen fluctuations due to changing regulations, with the RBI issuing warning notices and bans on crypto transactions.
- Cryptocurrency's impact on the Indian economy includes potential job growth, enhanced transparency, and quicker digital payments, but also poses risks like high volatility and legal uncertainties.
- The Indian government introduced taxation on virtual digital assets in the 2022 Union Budget to prevent revenue loss and imbalance in economic taxation.
- Regulatory efforts like the VASP notification in 2023 aim to align India's crypto regulations with international norms to enhance oversight and compliance.
- Both the Reserve Bank of India and SEBI have been involved in regulating cryptocurrency activities, with SEBI suggesting differentiated oversight based on the nature of crypto assets.
- Recent developments in India include the ban on URLs of certain crypto exchanges for non-compliance with anti-money laundering laws, reflecting ongoing regulatory challenges.
- Cryptocurrency trading has seen significant growth in Indian cities, prompting a reevaluation of crypto policies in response to global changes to foster transparency and financial stability.
- Cryptocurrency can serve as a catalyst for economic growth in India, but the lack of proper regulation raises concerns about potential economic losses, highlighting the need for a well-defined regulatory framework.
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