Upto 60% Off on UPSC Online Courses

Avail Now

Crypto Assets

September 11, 2023

GS Paper III Indian Economy

Context:

The IMF and FSB, upon request from the Indian G20 Presidency, advise against banning crypto-assets.

Recommendations:

Suggests introducing a licensing regime for crypto-asset platforms.

Cryptocurrency:

Cryptocurrency is a digital form of currency secured by Blockchain Technology.
It operates in a decentralized manner, free from government or institutional control.
Notable examples include Bitcoin, Ethereum, and Litecoin.

Advocates applying anti-money laundering and counter-terrorist financing standards to crypto-assets.
Marks the beginning of a global conversation on crypto-asset regulation.

Implications on the Financial Ecosystem:

Macroeconomic stability: Crypto adoption can affect monetary and fiscal policy effectiveness.
Regulatory challenges: Crypto-assets pose legal, regulatory, and enforcement challenges in different jurisdictions.
Legal risks: Recognition of crypto-assets as legal tender can raise legal issues.

India’s earlier stance:

In 2018, India proposed banning virtual currencies.
RBI restrained banks from dealing in cryptocurrencies, later reversed by the SC in 2020.

Financial integrity risks: Pseudonymity and weak AML/CFT measures make crypto-assets attractive to criminals.Market integrity: Non-compliance and lack of regulation can harm market participants.
Environmental risks: High energy consumption associated with crypto mining.

Way Forward:

Cryptocurrency Regulation in India:

No central authority regulation for crypto as a payment medium.
30% tax deduction on virtual currency transfers with 1% TDS.

Protect monetary sovereignty through effective policies.
Counter capital flow volatility.
Address fiscal risks and establish clear tax treatment.
Implement FATF and IOSCO standards for financial and market integrity regulation.

News Source: Livemint

To get PDF version, Please click on "Print PDF" button.

Recent Post
Most Viewed Post

UNION BUDGET 2024-25

The Issues With State-Sponsored Street Art

How children win with U-WIN, Govt’s new online vaccine por...

Benefits Of The Domestic Silk Route

Cops Can’t Force, Supreme Court Pauses Kanwar Yatra Fo...

From Madhya Rekha to Sindhu-Sarasvati: Major shifts in Class...

India’s Health Care Journey: Progress and Promise | PW...

Patient Safety Rights Charter: A Global Initiative for Safer...

ILO Report On Occupational Safety And Health (OSH)

Outreach to Diaspora and Statesmanship

India and the Artemis Accords

Laying the foundation for a future-ready digital India

Recent Editorial

UNION BUDGET 2024-25

The Issues With State-Sponsored Street Art

How children win with U-WIN, Govt’s new online v...

Benefits Of The Domestic Silk Route

Cops Can’t Force, Supreme Court Pauses Kanwa...

From Madhya Rekha to Sindhu-Sarasvati: Major shift...

Popular current affairs

News in Shorts: 24 July 2024

Climate Finance Taxonomy

Budget 2024–25: Unemployment

Supreme Court Split Verdict on GM Mustard Approval

Corridor Projects Announced for Bihar’s Vishnupa...

Webb Telescope On Cosmic Brown Dwarfs

Our Courses

Our Courses

THE MOST
LEARNING PLATFORM

Learn From India's Best Faculty

Subscribe our Newsletter

Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.

*Promise! We won't spam you.

Yes! I want to Subscribe.

THE MOST
LEARNING PLATFORM

Learn From India's Best Faculty

Follow Us:

Subscribe our Newsletter

Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.

*Promise! We won't spam you.

Yes! I want to Subscribe.

Contact Details

Download Our App