December 9, 2022

Published from Mumbai, Delhi & Bhopal

Why the Indian Government feels that the cryptocurrencies are a threat to the youth and what can be done about it

In his first public comment on cryptocurrencies, PM Narendra Modi on 18th November, 2021 warned that bitcoin presents a lucrative opportunity that lures young investors into this space with a dream to harness massive returns. He believes that many young investors without fully understanding the risks associated with it, remain vulnerable. This comes a day after the remarks of the RBI Governor Shaktikanta Das, during his address in State Bank of India’s Economics Conclave, which hinted at deeper issues involved with the advent of cryptocurrency that could raise serious questions of the macroeconomic stability of the country. While nations across the world have chosen multiple directions at embracing this new age technology, Governor Das’s remarks hold a crucial question on the future of cryptocurrency in India. As we read the two statements together in light of past measures adopted by the Government towards cryptocurrency, the Government is expected to allow cryptocurrency to be treated in the manner of securities and be brought under the jurisdiction of the Securities and Exchange Board of India.

It is expected that proposed legislation on cryptocurrency in India could indicate that the regulations shall regulate digital currencies without altogether banning it. Thus, cryptocurrencies may be treated like assets such as gold, stocks and continue to be allowed for trade in India. While on one hand, certain stakeholders expect that cryptocurrencies should be entirely banned in India due to its potential risk to the financial stability, others are hopeful that the Government would not ban it but bring stringent regulations to protect young and vulnerable investors.

On 17th November, 2021, RBI Governor Shaktikanta Das, during his address in State Bank of India’s Economics Conclave, hinted at deeper issues involved with the advent of cryptocurrency that could raise serious questions of the macroeconomic stability of the country. While nations across the world have chosen multiple directions at embracing this new age technology, Governor Das’s remarks hold a crucial question on the future of cryptocurrency in India.

While the Government is at the stage of drawing legislation, various prominent crypto exchanges in India have adopted a self regulation method to build trust among its users and pave the way for transparency in this domain. On the other hand, RBI Governor Das has expressed his concerns on how the cryptocurrencies, if left unregulated, could destabilise the financial set up. Thus, the Government plans to expedite the process of introducing a legislation to regulate the same by November-December this year. Until these developments are finalised, much of the onus falls back on investors and traders in the crypto space to be more aware and ensure that they perform due diligence before investing their hard earned money.

With major crypto exchanges starting their exclusive courses on cryptocurrencies and growth of influencers in this space, there is immense scope for the youth to find resources to learn the basics of this new technology. One of the prominent twitter influencers whom we recommend to follow is DaCryptoGeneral. With a strong presence on twitter, he actively engages with crypto enthusiasts to simplify complex terminologies and processes behind cryptocurrency to help democratize information on this new technology. Believing in the potential of this emerging technology, he advocates that the youth should actively deliberate on what’s there for the future and believes that a reading of cryptocurrency along with blockchain technologies and other allied domains can help prepare the youth for the future. He not just provides updates on new promising tokens to consider for investment, his content also advocates for proper due diligence before any investment is made. From what can be learnt from his website, DaCryptoGeneral started his journey in the crypto space as early as 2014 when he used to invest in Bitcoin and other tokens using his pocket money and income from side hustles. He had a major turning point in his journey when he identified a popular token SHIBA INU at a very nascent stage which today has become one of the top ten largest cryptocurrencies and helped him reap massive returns. He regularly invests his money on emerging ideas and tokens in this space and contributes to organisations involved in educating people about cryptocurrencies.

As this emerging technology grows, the investors, especially the youth, must ensure that they perform proper due diligence before investing their money into this ecosystem. With over 15-20 million investors in India as claimed by major crypto exchanges, the industry is bound to rise with supportive regulations. Thus, the role of big investors, technology experts and influencers in the ecosystem becomes crucial in driving this ecosystem in the right direction.

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