Govt should expedite launch of CBDC rather than imposing a ban on crypto

Even as the government panel recommends banning all private cryptocurrencies with a provision of a jail term spanning 10 years and heavy fines on anyone dealing in digital currencies, the virtual currency continues to rule the roost.

Crypto and blockchain being a global market and industry buzzword, saying a 'no' to virtual currency will not serve the purpose. Hence, the right approach would be to roll out CBDC, the RBI has already started working on, as soon as it was possible. Though there are hitches as it will have to cross various financial regulatory hurdles.

The government believes that investing in digital currencies, saying these were like 'Ponzi schemes' that offer unusually high returns to early investors. The best way to put a curb on the digital gold would have been that the government comes up with its CBDC as soon as it was possible.

Apart from being government controlled, the proposed digital currency will also help the country have such a virtual currency which was fully transparent and hence free from any kind of transaction-related problem. In fact, the Panel has also asked the government to consider the launch of an official government-backed digital currency in India, to function like bank notes, through the Reserve Bank of India (RBI).

Tax authorities sent notices to tens of thousands of people dealing in cryptocurrencies after a nationwide survey showed more than $3.5 billion worth of transactions over a 17-month period.

Not to mention that driven by increasing interest from institutional investors and retail investors as well into the crypto assets, blockchain-based products and services like NFTs, cryptocurrency market has soared past $3 trillion market-cap.

Recent developments in the industry, including bitcoin ETF listing in the US, have led to further excitement around crypto mainstreaming and will continue to expand crypto-asset adoption globally and in India.

In an era of digital payments, paper money is slowly contracting to make way for its digital counterparts and cryptocurrencies are going to be a significant part of those. It's easy to use private crypto coins to launder money or use crypto mixer to hide drug or blood money, but crypto also employs over 50,000 people in India and has immense potential to push India as a true 21st century super power.

Crypto industry needs regulation, but it should be inclusive. A taxation process like TDS where profits are taxed at withdrawal sources, crypto exchanges are a good strategy to start. The more it becomes an open-ended ecosystem, the more value it will bring to the country's economy. The crypto market ecosystem has emerged as the most profound application of blockchain technology in finance. The crypto market ecosystem has emerged as the most profound application of blockchain technology in finance. One can only hope that some important decision was taken by the government and the announcement for this was made in the winter session of Parliament.