The last few days have seen extraordinary volatility when it comes to the values of cryptocurrencies on multiple exchanges across the world. Although the champions of the cause have stated that this drop is not unprecedented and, in the past, cryptocurrencies have recovered from similar falls, the bigger question is should reliance just be placed on the historical performance or should checks, and balances be introduced in the system?
The above issue has become more pertinent in India as increasingly, citizens are attracted to crypto-trading as investment options as the volumes continue to increase on a daily basis.
Let’s look at the government’s efforts in trying to regularise this market, the predicaments it faces and the ideal policy that may suit a democracy like ours.
The Current Policy
While cryptocurrencies are not illegal, India does not have a regulatory framework to govern cryptocurrencies. In the past, the Reserve Bank of India (RBI) and the Centre have warned against the potential misuse of the technology and have displayed proclivities towards a blanket ban on the use of cryptocurrencies in India.
The instantaneous need for regulation cannot be denied — with introduction of appropriate compliances, disclosures and applicable penalties for non-compliance, the market players in the crypto industry shall be more at ease and be able to operate to their full potential.
India should not fall behind other countries by delaying the introduction of policies and regulations in the crypto space. Creating accountability and instilling trust in the crypto asset market by way of regulation is the need of the hour and the responsibility of the government. Stakeholders are keenly awaiting a definitive response.
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