By dubbing 'Ponzy Scheme', do not treat Bitcoin as a mistaken identity

Even as the government gears up to introduce a ruling to ban cryptocurrencies, the use of the virtual currency is rather on the rise in the country. The need of the hour was to have a comprehensive policy in place so as to ensure the proper regulation of the virtual currency, rather than putting a blanket ban on it.

It assumes significance at a time when the government is currently busy framing a set of laws to regulate fining anyone trading in the country or even holding such digital assets.

The FM has clarified that the government was for it and the proposed Bill will give an official nod for the use of crypto currency under the new regulated regime. In fact, the dichotomy of the government, when your right hand doesn't know what your left hand was doing, has created confusion among the people who are trading the same.

For example, the proposed Bill, is touted to criminalize possession, issuance, mining, trading and transferring crypto-assets. But the reality is quite different. First, you cannot stop an in-thing globally. Secondly, use of Bitcoin in the country at present was merely one per cent of total global assets. So, any regulation will not have a wider implication. At the same time, saying 'No' to a globally accepted digital currency will simply mean that we are out of the global economic system which may cost the country's economic progress dearly in days to come.

That the Bill would give holders of cryptocurrencies up to six months to liquidate, after which penalties will be levied, will not help. Rather, the investors need to be educated about the forthcoming laws and how can they avoid any action to be taken by the government for violation of norms. It was a year ago when Supreme Court struck down a 2018 order by the central bank forbidding banks from dealing in cryptocurrencies, prompting investors to pile into the market. The court ordered the government to take a position and draft a law on the matter. It is how the government came into action. The good news is that RBI is working on launching its own digital currency. Though it shouldn't mean banning Bitcoin as you will have to allow other digital currencies to be traded under a regulated regime for other countries to accept your own digital coin.